Legal due diligence checklist india

Due diligence of a company is usually performed before the business sale, private equity investment, bank loan funding, etc. In the due diligence process, the financial, legal and compliance aspects of the company are usually reviewed and documented. In this article, we review the process for due diligence of a company ( Private Limited Company or Limited Company) and provide a checklist for those performing due diligence on a company in India. Before doing due diligence , you need to acquire vast knowledge regarding compliances.

India has hundreds of laws that can apply to a business and missing a major one could mislead your due diligence. Preparing the due diligence checklist can be quite a cumbersome task if you have never done it earlier.

Why is due diligence important? Relation to Investment in Venture Capital Undertakings or Business Entities by Venture Capital Funds or Strategic Investors. Ideally, while conducting due diligence in India , companies should review the following points: Personnel: The terms and conditions of employment as well as the experience of the staff should be reviewed. With respect to each product line, understand the Target company’s existing marketing strategy and any contemplated changes.

Still, there are certain due diligence matters that are generally included in transactions. Below are nine areas of due diligence that are generally addressed on a due diligence checklist : 1. Additional issues may be appropriate under the circumstances of a particular deal. Some of the key documents that are investigated are –.

The Certificate of Incorporation. The Memorandum of Association. The Articles of Association. Also, review commercial management, including customer care, research and development, and marketing.

Detailed description of the Company and its Business Model b. ITEMS IN GENERAL LEGAL DUE DILIGENCE INCLUDE: Copies of agreements or instruments that place restrictions or encumbrances on assets. Contracts with obligations such as covenants and indemnification. Further the nature of such due diligence shall vary from transaction to transaction and shall be dependent on numerous factors including but not limited. Due diligence that ignores the future potential to be derived from the investment will have too narrow a focus to support sound due – diligence practices.

Relying on traditional financial, legal and environmental data when conducting due diligence is insufficient. This may be available from the various Indian public records offices, or if more detaile may need the management of the target company to arrange some of the information. How to do due diligence for land purchase.

What is a sale deed and terms and conditions that home buyers should be aware of. Real estate basics: What is an Occupancy Certificate? When and how should you file a complaint under RERA? How carpet area definition changes in RERA.

To verify the adherence with financial, legal , and environmental reports for validating the company acquisitions, business partnerships or banking loans, etc.

The checklist consist of financial checklist , legal due diligence checklist , operational list, HR checklist etc. Due Diligence is now finding deserved place in Indian Statutes. A due diligence checklist helps ensure that the final decision is based on a thorough investigation of all aspects of the business. While buying a property in India , it is advisable to conduct due diligence to verify the titles of the property and also check whether there are any encumbrances over the property. Sell side due diligence is when the due diligence exercise is carried out by the investee company on itself and the outcome in form of a detailed report is then shared to the interested parties.

The later is referred to as vendor due diligence and is a preferred options when there are more than one interested parties. DUE DILIGENCE OF PROPERTY TITLE means investigation or legal audit to confirm all material facts relating to its history, title and other privileges and obligation attached with it. Basic Corporate Documents: a. Project Documentation (a) Have the following documents been provided?