Overview
Due diligence is a structured review of a company’s records, carried out before an investment, acquisition, merger, loan or joint venture. It verifies that the company is legally in good standing and that there are no undisclosed liabilities. Secretarial due diligence focuses on corporate records: incorporation, share capital history, allotments and transfers, statutory filings, board and shareholder approvals, charges, FEMA reporting and governance compliance.
What Due Diligence Covers
- Incorporation documents and changes to the MoA and AoA.
- The share capital trail: allotments (PAS-3), transfers, stamp duty, valuation compliance and demat status.
- Annual and event-based MCA filings and any defaults.
- Board, committee and general-meeting minutes and approvals.
- Statutory registers and records of beneficial ownership (BEN-2).
- Charges created and satisfied (CHG-1/CHG-4).
- FDI and ODI compliance: FC-GPR, FC-TRS, FLA and pricing.
- Related-party transactions, loans and investments (Sections 185, 186 and 188).
- Directors’ KYC, disqualifications and KMP compliance.
- Pending notices, adjudication and compounding history.
Who Needs This Service?
Investors, acquirers, lenders, companies preparing for fundraising (vendor due diligence), and promoters preparing for an exit. It is not a statutory requirement, but it is standard practice in transactions.
Due Diligence in Chennai / Tamil Nadu
For Tamil Nadu companies, the review also checks that stamp duty on share certificates and share transfers has been paid correctly under Tamil Nadu law, and that filings with ROC Chennai or ROC Coimbatore and any RD or NCLT Chennai proceedings are in order.
Benefits
Due diligence identifies issues that may need rectification, indemnity or a price adjustment before completion. Vendor due diligence lets a company fix gaps before investors find them.
Types of Due Diligence Compared
Different reviews answer different questions.
| Type | Focus | Typical documents |
|---|---|---|
| Legal | Contracts, litigation, title | Agreements, court records, title papers |
| Financial | Quality of earnings and liabilities | Financial statements, ledgers |
| Tax | Tax exposure and compliance | Returns, notices, assessments |
| Secretarial | Corporate records and filings | Registers, minutes, ROC filings |
Process
- Agree the scope and materiality thresholds.
- Issue a document request list.
- Review the MCA records and the physical records.
- Hold management discussions.
- Prepare a report with findings graded by risk.
- Advise on rectification, for example compounding, delayed filings or ratification.
Common Findings and Typical Responses
Findings drive price, conditions and remedies.
| Finding | Impact | Typical response |
|---|---|---|
| Unfiled returns | Penalties and disqualification risk | Regularise before closing |
| Unregistered charges | Doubt over security | File and register the charges |
| Related-party transactions without approval | Governance risk | Ratify or restructure |
How KVA Handles Due Diligence
Karthick Vijayakumar & Associates, Company Secretaries, supports you through each stage with a single point of contact and a clear record of what has been done.
| Step | Stage | What KVA does |
|---|---|---|
| 1 | Requirement review | We understand your entity, objective and timeline, and confirm what Due Diligence involves for your specific facts. |
| 2 | Document checklist | You receive a clear list of documents, particulars and approvals needed, with gaps flagged early. |
| 3 | Preparation and filing | Our team prepares, reviews and files the required forms and records, and tracks each acknowledgement. |
| 4 | Completion and follow-up | We hand over final records and explain the compliance that follows, so nothing is missed afterwards. |
Fees and Timeline
There is no government fee. Professional fees depend on scope and are available on enquiry. The review typically takes 1–4 weeks, depending on the company’s size and how readily documents are available.
Why Karthick Vijayakumar & Associates
Work is handled by company secretaries who deal with statutory filings and governance every day.
Timelines for Due Diligence are tracked so that approvals and filings do not slip.
Plain-language updates at each stage, with no guesswork about what is pending.
Organised, decision-ready documentation that supports audits, banks and future filings.
Frequently Asked Questions
A review of a company’s compliance with company law and related corporate laws, based on its statutory records and MCA filings.
Financial due diligence examines accounts, earnings and tax. Secretarial and legal due diligence examines corporate records, approvals and legal compliance.
A review commissioned by the company or seller before approaching investors, so that issues can be fixed in advance.
Share allotments without valuation or proper filings, missing FEMA reports, gaps in the minutes, unregistered charges, loans to directors in breach of Section 185, and disqualified directors.
Many can, through delayed filings with additional fees, compounding under Section 441, adjudication, or ratification by the board or members.
The scope can be scaled down, but a basic review of the share capital and filings is still advisable.
The MoA and AoA, the statutory registers, the minutes, MCA challans and forms, share certificates, agreements, FEMA filings and bank sanction letters.
Yes. It usually includes a search of court and tribunal records and management disclosures.
The party that commissioned it, typically the investor, acquirer or lender, under confidentiality terms.
It reflects the position as at its cut-off date. Transactions often include a bring-down review before completion.
Financial, legal, tax, secretarial, commercial and operational due diligence, each reviewing a different aspect of the target business before an investment or transaction.
Incorporation documents, statutory registers, board and shareholder resolutions, filings with the Registrar, allotments and transfers of shares, and compliance with applicable company law.
It depends on the size of the target and how quickly documents are provided; a focused exercise may take a few weeks, while larger transactions take longer.
The buyer or investor usually does, while sellers may commission vendor due diligence to prepare for a sale and fix issues in advance.
A secure virtual repository where the target uploads documents for the reviewing parties, organised by category so access and queries can be tracked.
A written report listing findings, risk ratings and recommended actions, often supported by an issues list that parties can use to negotiate conditions and warranties.
Missing minutes, unreported share transfers, unfiled forms, expired DSCs, unrecorded charges and director changes not reported to the Registrar.
Reviewing professionals work under non-disclosure agreements and use the information only for the engagement, as agreed with the client.
An audit gives an opinion on financial statements, while due diligence is a purpose-specific review of risk, compliance and value, usually for a transaction.
Yes. Investors commonly review incorporation documents, cap table, ESOP records and filings before closing a funding round, so being prepared helps close faster.
Preparing for an Investment or Acquisition?
Contact Karthick Vijayakumar & Associates to discuss the scope of a secretarial due diligence review.
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Third Floor, New No. 599, Old No. 230, Konnur High Road, Ayanavaram, Chennai, Tamil Nadu, 600023, India
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