Quick answer
What do due diligence services cover?
Due diligence services cover a structured review of a target business before a deal: financial due diligence on accounts, earnings and debt; tax and GST due diligence on filings and exposures; secretarial checks on MCA records and shareholding; and legal review of contracts, property and disputes. The output is a report listing risks and how to handle them in the deal.
- Done before money or shares change hands
- Financial, tax and legal are the core streams
- Public MCA and GST records are checked first
- Findings feed price, warranties and conditions
- Scope is fixed in writing before work starts
What are due diligence services and who needs them?
Due diligence is an independent check of a business carried out for the person taking a risk on it. You need it when you are about to commit money, credit or reputation to a company you do not control, and the only information you have so far came from the other side.
People who ask us for a review in Delhi usually fall into these groups:
- Angel and seed investors putting money into a private limited company.
- Buyers acquiring a company, its shares or a running business.
- Lenders and NBFCs assessing a borrower beyond its submitted statements.
- Joint venture partners and franchisors vetting a local partner.
- Sellers who want a vendor review done first, so buyers find no surprises.
- Foreign companies buying into or partnering with an Indian business.
The work is different from an audit. An audit gives an opinion on financial statements for a year. Due diligence answers a buyer's question: what am I really getting, and what could go wrong after I pay?
What types of due diligence services are there?
Most deals combine several streams. Financial and legal due diligence are the minimum for an acquisition; small investments often start with financial, tax and secretarial checks. The table shows what each stream looks at and who usually does it.
| Stream | What it checks | Usually done by |
|---|---|---|
| Financial | Quality of earnings, revenue recognition, working capital, debt and debt-like items, related party transactions | Chartered accountants and finance professionals |
| Tax (income tax and TDS) | Returns filed, assessments, notices, demands, TDS compliance, tax positions that could be challenged | Chartered accountants and tax advisers |
| GST | Registrations, return filing history, input tax credit claims, e-way bills, notices and pending demands | GST practitioners and chartered accountants |
| Secretarial and ROC | MCA filings, shareholding history, share allotments, charges, director records, statutory registers | Company secretaries and compliance professionals |
| Legal | Contracts, property title, licences, litigation, employment terms, intellectual property | Advocates |
| Labour and payroll | PF, ESI and payroll compliance, contractor arrangements, pending dues | Payroll and compliance professionals |
| Commercial and operational | Customers, suppliers, concentration risk, systems, key people | Industry and finance professionals |
Overview prepared by CA in Delhi, November 2026. We agree the streams for your deal in a written scope before work starts.
Need help with due diligence services? Talk to a chartered accountant in Delhi today. First call is free.
What does financial due diligence look at?
Financial due diligence tests whether reported profit is sustainable and whether the balance sheet hides anything. It adjusts earnings for one-off and non-business items, maps all debt and debt-like obligations, and checks that working capital is normal for the business rather than dressed up for the sale.
In Delhi trading and manufacturing businesses, the points that most often change the deal are:
- Sales in the books that do not match GST returns or bank credits.
- Large cash transactions or entries routed through related firms owned by the promoters.
- Unsecured loans from relatives or group concerns with no agreement.
- Stock values that do not reconcile with the stock statements given to the bank.
- Unpaid statutory dues, such as TDS, PF or GST, sitting as current liabilities.
If you also need a price for the shares, a separate valuation is the right tool. See our business valuation page for how that work differs.
What documents are needed for due diligence?
The target company shares a data room or folder with its financial statements, tax and GST filings, MCA records, contracts and registrations. The quality and speed of the review depend on how complete this pack is, so we send a request list on day one.
| Area | Documents requested | What we check them against |
|---|---|---|
| Accounts | Audited financial statements for three years, latest management accounts, ledgers, trial balance | Bank statements, GST returns, tax returns |
| Income tax | ITRs, tax audit reports where applicable, assessment orders, notices, Form 26AS | Books and the income tax portal record |
| GST | GSTR-1, GSTR-3B and annual returns, notices, e-way bill data | Sales register and input tax credit claims |
| ROC | MOA, AOA, registers, board and general meeting minutes, share certificates, MCA filings | MCA master data and charge records |
| Contracts | Customer, supplier, lease, loan and employment agreements | Revenue, liabilities and change-of-control clauses |
| Licences | GST, FSSAI, trade, factory or sector licences as applicable | Validity dates and the business actually carried on |
| Disputes | Pending litigation, notices, demands and claims | Provisions in the accounts |
Request list used by CA in Delhi, November 2026. The list is trimmed or extended to match the agreed scope.
How do due diligence services work, step by step?
A due diligence engagement moves from scope to report in a set order. Agreeing the scope and the materiality level up front keeps the cost in line with the size of the deal and focuses the work on items that could change your decision.
- 1
Scope and confidentiality
We agree the streams, period, materiality and deadline, and sign a confidentiality undertaking if the seller asks for one.
- 2
Public record checks
Before the data room opens, we review MCA master data, charges, director records and the GST registration status of the target.
- 3
Request list and data room
The target uploads documents against our list; gaps are logged and followed up.
- 4
Analysis and management calls
We test the numbers, reconcile filings and hold question sessions with the target's management and accountants.
- 5
Draft findings
You receive a red-flag summary with each issue rated by impact and a suggested way to deal with it.
- 6
Final report and deal support
The final report feeds your price, warranties, indemnities, escrow or conditions before signing.
What red flags do due diligence reviews find most often?
The most common findings in small and mid-sized Indian companies are gaps in compliance rather than fraud: missing ROC filings, mismatched GST data, unrecorded liabilities and undocumented related party dealings. Each one can be priced or fixed if it is found before signing.
| Finding | Why it matters | Usual deal response |
|---|---|---|
| Pending ROC annual filings or event forms | Additional fees and director exposure | Seller files before closing |
| GST turnover lower than book sales | Possible tax demand with interest | Specific indemnity or price adjustment |
| Share allotments without proper filings | Doubts over who owns what | Rectification as a condition precedent |
| Unsatisfied charges on the MCA record | Assets may still be pledged to a lender | Satisfaction filed before payment |
| Unpaid TDS, PF or ESI | Interest and penalties fall on the company | Seller clears dues; amount held in escrow |
| Key customer contract with change-of-control clause | Customer could exit after the deal | Customer consent obtained before signing |
General overview prepared by CA in Delhi, November 2026. Each finding is assessed on the facts of the deal.
What should Delhi buyers check that outside reviewers miss?
Delhi deals often involve family-run companies with several related firms, cash-heavy trade and leased premises. A local review should map the promoter group, check how goods and money move between group entities, and confirm that the registered office and godowns match the GST and MCA records.
Markets such as Chandni Chowk, Karol Bagh and the Wazirpur and Okhla industrial areas run on long supplier credit and informal arrangements. These are normal for the trade but need to be written down before a buyer steps in. When the target is in central Delhi, our page for a CA in Connaught Place covers local support. If the deal brings in a foreign investor, the share issue is later reported to the RBI through FC-GPR, so the review should confirm the target can meet those filings.
If the review suggests deliberate manipulation rather than poor compliance, a targeted forensic audit is the next step, not a wider due diligence.
How does CA in Delhi provide due diligence services?
We scope the review, coordinate the streams and deliver one report from our office at Netaji Subhash Place. You get a fixed quote before work starts, based on the target's size, the streams chosen and your deadline. We do not publish prices because two reviews are rarely alike.
What you send: the target's name and CIN, the deal type and size, your deadline and any information memorandum you have. What you get back: a scope letter, a request list, a red-flag summary and a final report you can hand to your lawyer.
- Moneymji lists due diligence, valuation and ROC compliance, which covers the financial, secretarial and pricing side of most small deals.
- Greenwolf Advisors lists cross-border structuring and financial controls, relevant when a foreign party is investing or the deal needs a holding structure.
Legal due diligence on contracts, title and litigation is passed to partner advocates, and we confirm their scope in the same quote. Compare firms on our list of chartered accountant firms in Delhi, or start with a tax consultant near me if your question is only about the target's tax position. Call or WhatsApp +91 99114 92897.
Frequently asked questions
How long does due diligence take for a small company?
It depends on the scope and how quickly the target shares documents. A focused financial, tax and secretarial review of a small private company is usually measured in weeks, not months. We give you a timeline in the scope letter once we know the streams and the state of the data room.
What is the difference between due diligence and an audit?
An audit gives an opinion on whether one year's financial statements are true and fair, and it follows auditing standards. Due diligence is a deal-focused review for a buyer, investor or lender, looking forward at risks, liabilities and sustainable earnings across several years and areas, including tax and legal.
Is due diligence mandatory in India?
For private deals between parties, no law makes it mandatory, but investors, banks and acquirers almost always require it before releasing money. Regulated transactions can carry their own checks. Skipping due diligence leaves you relying entirely on the seller's word and the warranties in the agreement.
Can the seller see the due diligence report?
The report belongs to the party who commissions it. Buyers usually keep it private and use it to negotiate. A vendor due diligence report is the opposite: the seller commissions it and shares it with bidders to speed up the sale.
What is vendor due diligence?
Vendor due diligence is a review the seller commissions before going to market. It finds and fixes problems early, gives buyers a ready report and shortens negotiations. Buyers often still run a lighter confirmatory review of their own on top of it.
Do you check MCA and GST records before getting documents?
Yes. Public records on the MCA portal show the company's filings, directors and charges, and the GST portal shows registration status and filing history for a GSTIN. These checks often reveal issues before the seller shares anything, and they shape the questions we ask.
Can due diligence be done online for a target outside Delhi?
Yes. Most of the work runs on a shared data room, portal records and video calls with management. A site visit is added only when stock, premises or operations need to be seen in person, and that is agreed in the scope.
What happens after due diligence finds problems?
Findings are translated into deal terms: a lower price, a specific indemnity, money held in escrow, conditions the seller must meet before closing, or in serious cases a decision not to proceed. We present each finding with a suggested response so your lawyer can draft accordingly.
Do I need legal due diligence as well as financial?
For an acquisition, yes in almost every case, because ownership, contracts, property and disputes are legal questions. For a small minority investment, financial, tax and secretarial checks may be enough at first. We advise on scope based on the deal size and the risks you care about.