Due Diligence

Due Diligence India is not governed by a single statute but draws from multiple laws depending on the transaction. Key statutes include the Companies Act, 2013 (for corporate records and board resolutions), the Indian Contract Act, 1872 (for contract validity), the Specific Relief Act, 1963 (for enforceability of agreements), and the Insolvency and Bankruptcy Code, 2016 (for financial health). For intellectual property, the Patents Act, 1970, Trade Marks Act, 1999, and Copyright Act, 1957 apply. Real estate due diligence involves the Transfer of Property Act, 1882 and the Registration Act, 1908.

Due Diligence India involves multiple government departments. The Ministry of Corporate Affairs (MCA) provides access to company filings via the MCA21 portal (www.mca.gov.in). For intellectual property, the Controller General of Patents, Designs and Trade Marks (www.ipindia.gov.in) offers trademark and patent searches. The Registrar of Companies (ROC) maintains records of charges, directors, and annual returns. For litigation checks, the National Judicial Data Grid (njdg.ecourts.gov.in) provides case status.

The due diligence process begins with the client engaging an advocate who issues a checklist of documents. The target company provides documents such as incorporation certificates, board resolutions, shareholding patterns, contracts, property titles, and litigation records. The advocate reviews these documents against applicable laws, identifies red flags, and prepares a due diligence report. The report categorizes risks as high, medium, or low and may include recommendations for mitigation. The process is iterative; the advocate may request additional documents or clarifications.

Key forms and documents required for Due Diligence India include: Certificate of Incorporation (Form INC-1), Memorandum and Articles of Association, Board Resolutions (Form MGT-14), Annual Returns (Form MGT-7), Financial Statements (Form AOC-4), Register of Directors (Form DIR-12), Charges (Form CHG-1), and Share Transfer Forms. For IP due diligence: trademark registration certificates, patent specifications, and assignment deeds. For litigation: copies of plaints, written statements, and court orders.

There is no statutory eligibility criteria for conducting due diligence. Any person or entity intending to invest in, acquire, or lend to an Indian company may request due diligence. The advocate must be enrolled with a State Bar Council and have expertise in corporate and commercial laws. The target company must provide access to its records; refusal to cooperate may limit the scope of due diligence.

The timeline for Due Diligence India depends on the size and complexity of the transaction. A standard due diligence for a small company may take 2-4 weeks, while a large transaction with multiple subsidiaries may take 6-8 weeks. The process includes document collection, review, and report drafting. Delays may occur if documents are incomplete or if legal issues require further investigation.

Fees for Due Diligence India are not prescribed by statute and are negotiated between the advocate and client. The fee structure may be a fixed fee or hourly billing. Below is an indicative fee table for reference:

Note: These are indicative ranges; actual fees depend on scope and advocate's experience.