pvtltd.co

Fundraising

Due diligence prep for startups in India.

Prepare your startup for investor due diligence with cleaner documents, records, and compliance readiness before the questions start coming in.

Reviewed by CA Harun Raaj, ICAI Reg. No. 238303·Last reviewed:
Starting from Contact usTypical timelineDue diligence prep

Prepare your startup for investor due diligence with cleaner documents, records, and compliance readiness before investor review.

What is included
  • • Cleanup and readiness process for investor review
  • • Compliance record mapping
  • • Statutory register review
  • • Cap table and disclosure reconciliation
  • • Diligence issue list and follow-up support
Documents required
  • • Certificate of Incorporation, MOA, and AOA
  • • Statutory registers and board resolutions
  • • Audited financial statements and tax returns
  • • FC-GPR / FLA records where foreign investment exists
  • • Cap table, ESOP, and share transfer records
Government fees

See the fee table below for the statutory filing charge and common delay logic.

Legal basis
  • • Sections 88, 85 and 189 of the Companies Act 2013
  • • Section 117 of the Companies Act 2013
  • • FEMA Notification No. 20(R)/2017
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Process

How the service works

The workflow is built to be predictable: document collection, legal review, filing, and post-filing follow-through.

Step 1Inventory

Inventory the diligence surface

We map the company records, filings, and documents that investors are likely to ask for so the work starts with a complete inventory.

Step 2Reconciliation

Reconcile the corporate trail

The review checks registers, resolutions, filings, and cap table records against each other so mismatches are caught early.

Step 3Regularisation

Cure gaps and regularise filings

If any missing filings or approvals surface, we create the follow-up path to cure them before diligence goes live.

Step 4Packaging

Package the investor-ready file

The cleaned records are assembled into a diligence pack that is easier for investors to review and for the company to maintain.

AEO summary

Short answer: due diligence prep is the process of cleaning up the company’s records and documents before investors review them in detail and start asking for missing pieces.

What investors usually ask for first

Investors usually start with the documents that prove the company is properly formed, properly managed, and properly filed. If those records are scattered, the diligence process slows down before the real questions even begin.

That is why due diligence prep is best treated as a cleanup exercise before the review starts, not during it.

  • • Statutory registers should be current.
  • • Board resolutions should line up with the filings.
  • • Cap table and tax records should match the same story.

What gaps matter most

The biggest problems are usually not dramatic. They are missing resolutions, stale register entries, unfiled ROC forms, or foreign investment records that do not reconcile cleanly with the cap table.

Closing those gaps early reduces the chance that investors will pause the round to ask for cleanup work.

  • • Any mismatch between books and filings is a diligence risk.
  • • Foreign investment needs clean FC-GPR support.
  • • Tax records should reconcile to the filed returns.

Government fees

Fee breakdown

ItemFeeNotes
Cure filings for missing ROC formsAs per MCA fee tableApplies only if the diligence prep work uncovers a filing that must be regularised.
FC-GPR filing or regularisationAs per RBI / MCA scheduleForeign investment reporting fees, if any, depend on the connected filing path.
No separate fee for the diligence review itselfNilThe work is a professional preparation engagement rather than a government filing.

Timeline

Typical turnaround

Typical timeline usually means a 2 weeks turnaround, assuming documents are complete and any board or shareholder approvals are already in place.

Pricing note

Any government fees depend on the filings or regularisations needed to cure the diligence gaps, not on the review process itself.

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FAQ

Frequently asked questions

Which statutory registers must a company produce during due diligence?
Investors typically request the Register of Members (Section 88, Companies Act 2013), the Register of Charges (Section 85), and the Register of Contracts or Arrangements in which directors are interested (Section 189). These are mandatory registers every private limited company must maintain and keep current. Gaps or late entries are red flags that can require board resolutions and fresh ROC filings to cure before a round can close.
What board resolutions need to be in order before a funding round?
Every significant corporate action must be backed by a board or shareholder resolution filed with the ROC under Section 117 of the Companies Act 2013 — this includes share allotments, ESOP grants, key contracts, and borrowing approvals. Investors cross-check resolutions against MCA filings, so undocumented decisions or missing MGT-14 filings create serious gaps in the audit trail. Retroactively filing these is possible but adds time and cost to the process.
How does FEMA compliance appear in a due diligence review?
If the company has received foreign investment, investors verify that FC-GPR forms were filed with the RBI within 30 days of allotment as required under FEMA 20(R). They also check that a valuation certificate from a SEBI-registered merchant banker or practising CA was obtained at the time of allotment. Missing or late FC-GPR filings attract compounding penalties under FEMA and can block the closing of a new round until regularised.
What tax records do investors check during due diligence?
Investors typically request ITR acknowledgements for the last 3 to 5 years, Form 26AS to verify TDS credits, and TDS returns (Form 24Q for salary, Form 26Q for non-salary) to confirm deduction compliance. They also look for any outstanding demand notices from the Income Tax Department under Section 156. Unexplained mismatches between the books, Form 26AS, and filed returns are common findings that require rectification or written explanation before closing.
How is the cap table verified for companies that have issued CCPS or CCDs?
Investors compare the statutory Register of Members (Section 88, Companies Act 2013) against the internal cap table, checking that every CCPS or CCD issuance has a corresponding board resolution, valuation report, and PAS-3 return filed with the ROC within 30 days of allotment. For convertible instruments, the conversion terms in the shareholder agreement must be consistent with what was disclosed to the ROC. Discrepancies between the ROC record and the internal model are among the most common deal-slowing findings in early-stage due diligence.

Canonical reference: https://www.pvtltd.co/services/due-diligence-prep

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Ready to move this filing forward?

We can help with the filing, the legal mapping, and the follow-up work that keeps the company compliant after submission.

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