Companies Act, 2013, Income Tax Act, 2025 (and 1961), CGST Act, 2017 & Foreign Exchange Management Act (FEMA), 1999

Compliance & Due Diligence

Comprehensive multi-statute regulatory compliance reviews, pre-investment financial due diligence, Quality of Earnings (QoE) analysis, and statutory health checks conducted across Companies Act 2013, Income-tax Act 2025 (and 1961), GST, FEMA, and labor welfare codes with universal UDIN certification.

CA Due Diligence

Official Portal Filing

State Stamp Advisory

Compliance & Due Diligence Statutory Advisory

Turnkey Statutory Filing

MCA & Tax Practice

Official Govt of India AuthorityMCA & Reserve Bank of India, Government of India

MCA V3 & RBI FIRMS Official Portals

The official Government of India portals for corporate compliance filings, checking master data, verifying charge registers, and reporting cross-border FDI transactions on the RBI FIRMS portal (firms.rbi.org.in).

Visit Govt Portal

STATUTORY OVERVIEW

Multi-Statute Compliance Auditing & Financial Due Diligence Assurance

Managing a commercial enterprise in India entails operating within an intricate multi-layered regulatory architecture spanning corporate secretarial laws under the Companies Act 2013, direct tax provisions under the Income-tax Act, 2025 (and Income-tax Act, 1961), indirect tax under GST enactments, cross-border regulations under FEMA, and social security labor welfare statutes. Non-compliance, systemic filing defaults, or unrecorded liabilities jeopardize commercial standing and expose company directors and Key Managerial Personnel (KMP) to severe personal liabilities under Section 166 of the Companies Act, 2013. Our Compliance and Due Diligence Audit practice provides an exhaustive 360-degree diagnostic evaluation of corporate regulatory standing, pinpointing latent liabilities and ensuring pristine corporate hygiene.

Statutory & Practice Summary • At-A-Glance

ICAI UDIN Authentication Mandate

Governing Framework

Companies Act, 2013, Income Tax Act, 2025 (and 1961), CGST Act, 2017 & Foreign Exchange Management Act (FEMA), 1999

Regulatory Authority

Ministry of Corporate Affairs (MCA), Central Board of Direct Taxes (CBDT), CBIC & Reserve Bank of India (RBI)

Professional Assurance

Chartered Accountants Attestation under ICAI Standards & Code of Ethics

DOCUMENTATION MATRIX

Mandatory Documents Checklist

Self-attested scanned copies required

1. Promoters / Partners / Directors KYC

✓Board of Directors / Investor Due Diligence mandate letter and mutual non-disclosure agreements
✓DIN KYC verification status of all directors on the MCA portal and active passport copies
✓Shareholding pattern and register of members under Section 88 of the Companies Act, 2013

2. Registered Office & Premises Proof

✓Proof of Registered Office premises and title/lease deeds of all active factories and branch units
✓Local municipal trade licenses, factory licenses, and SPCB Consent to Operate certificates

3. Specific Statutory Declarations & Enclosures

•Statutory registers: Register of Charges, Loans and Investments (Section 186), Related Party Contracts (Section 189)
•Minutes of Board of Directors meetings, Audit Committee meetings, and Annual General Meetings for the past 3 years
•Filed Form AOC-4 / AOC-4 XBRL (Financial Statements) and Form MGT-7 (Annual Returns) with ROC receipts
•Income tax returns (ITR-6), Tax Audit Reports (Form 3CD), and outstanding tax demand intimations
•Monthly GSTR-1, GSTR-3B returns, annual GSTR-9/9C reconciliation statements, and DRC-01 notices
•FEMA reporting acknowledgments: Form FC-GPR for foreign equity allotments and annual FLA returns filed with RBI

PROCEDURAL ROADMAP

Step-by-Step Filing & Approval Process

Structured execution roadmap managed by our Chartered Accountants from pre-filing due diligence to certificate allotment.

01Days 1 - 3

Regulatory Scoping & Data Room Setup

Defining audit scope across corporate, tax, FEMA, and labor laws, creating a secure encrypted virtual data room (VDR), and issuing regulatory requisitions.

02Days 4 - 12

Multi-Statute Verification & Walkthroughs

Verifying statutory registers, testing Section 185/186 loan compliance, checking MSME 43B(h) vendor aging, auditing GST 2B reconciliation, and testing labor challans.

03Days 13 - 18

Quality of Earnings & Exposure Modeling

Normalizing EBITDA, identifying debt-like items, testing working capital adequacy, quantifying unrecorded contingent tax exposures, and risk-scoring findings.

04Days 19 - 21

Due Diligence Dossier & Compounding Strategy

Delivering the executive Due Diligence Report / Red Flag Report with UDIN, formulating Section 441 compounding applications, and drafting pre-closing conditions precedent (CP).

Comprehensive Multi-Statute Compliance Health Checks

Practice Scope & Statutory Guidance

We audit corporate compliance across all key statutory dimensions: Companies Act 2013 (statutory registers, board and general meeting minutes, ROC annual filings, director disclosures, loan and investment limits under Section 185/186, related party transactions under Section 188); direct tax withholding under Section 53 and statutory payment rules under Section 55 of the Income-tax Act, 2025 (formerly Section 40(a)(ia) and Section 43B(h) of the Income-tax Act, 1961); GST Acts (monthly returns, dynamic GSTR-2B ITC matching, Rule 48(4) e-invoicing); FEMA cross-border regulations (FC-GPR, FLA returns); and central/state labor laws (EPF, ESIC, Gratuity, Bonus, and Professional Tax).

Pre-M&A & Private Equity Financial Due Diligence

Practice Scope & Statutory Guidance

For mergers, corporate acquisitions, joint ventures, and institutional private equity/venture capital investments, our due diligence team executes deep-dive evaluations of target entities. We analyze Quality of Earnings (QoE), normalize EBITDA by stripping non-recurring items, assess working capital peg adequacy, identify debt-like items, quantify unrecorded contingent tax exposures under legacy and new direct tax laws, and evaluate customer/vendor concentration risks.

Compliance Scorecard & Section 441 Compounding Support

Practice Scope & Statutory Guidance

Following our review, we deliver an executive Compliance Scorecard categorizing findings into Critical, Moderate, and Low risk tiers. Our advisory includes step-by-step remediation guidance, assisting corporate management in drafting compounding applications under Section 441 of the Companies Act, 2013, filing condonation of delay petitions under Section 460 with the Ministry of Corporate Affairs (MCA), and addressing adjudication notices under Section 454 to restore uncompromised regulatory standing.

STATUTORY MATRIX

Statutory Provisions & Regulatory Comparative Matrix

Comparative analysis of governing sections under the new framework alongside legacy statutory references.

Regulatory Law / Statutory Dimension	Governing Statute & Key Sections	Statutory Mandate & Risk Safeguard
Corporate Secretarial Compliance	Companies Act, 2013 (Sec 88, 134, 137, 185, 186)	Maintaining statutory registers, holding 4 board meetings annually, filing AOC-4 / MGT-7 within statutory deadlines.
Direct Tax & MSME Compliance	Income Tax Act, 2025 & Section 43B(h) / Section 55	Discharging withholding tax on 7th, timely filing 24Q/26Q, ensuring MSE vendors are paid within 15/45 days.
Indirect Tax & Dynamic Credit Match	CGST Act, 2017 (Sec 16, 37, 39 & Rule 48(4))	Claiming ITC strictly based on GSTR-2B, mandatory e-invoicing for turnover > ₹5 Cr, annual GSTR-9/9C reconciliation.
Foreign Direct Investment & FEMA	FEMA 1999 & RBI Foreign Exchange Regulations	Filing Form FC-GPR within 30 days of share allotment, annual FLA return by 15th July, compliance with pricing guidelines.
Director Fiduciary Due Diligence	Section 166 of Companies Act, 2013	Directors must act with reasonable care, skill, and diligence; compliance audits substantiate discharge of fiduciary duties.

ONGOING GOVERNANCE

Mandatory Post-Registration Compliances

Failing to complete statutory post-incorporation actions carries steep daily penalties. Our CA firm manages continuous compliance:

Form GNL-1 before RD / NCLTProactive Pre-Closing Regularization

Section 441 Compounding Application

Filing compounding petitions before the Regional Director or NCLT to rectify historical technical defaults under the Companies Act.

RBI FLA User PortalOn or before 15th July annually

Annual RBI FLA Return Filing

Mandatory annual filing of Foreign Liabilities and Assets by Indian companies that have received FDI or made ODI.

RBI FIRMS Portal (SMF)Within 30 days of share allotment

FDI Allotment Reporting (Form FC-GPR)

Reporting foreign capital inflows and share allotments with CS compliance certificate and valuer share valuation report.

Corporate Governance ArchiveMinimum 8 Years

Compliance Health Check Archival

Preserving verified regulatory dossiers, compounding orders, and tax clearance certificates to protect directors against personal liability.

FREQUENTLY ASKED QUESTIONS

Statutory FAQs & Practical Guidance

Frequently asked questions and procedural guidance regarding Compliance & Due Diligence.

What is Quality of Earnings (QoE) in financial due diligence?

Quality of Earnings (QoE) analysis examines the sustainability and accuracy of a target company's reported historical earnings. It strips out non-recurring revenues, discretionary owner expenses, aggressive accounting adjustments, and one-off windfalls to present a normalized, sustainable EBITDA run-rate, allowing buyers and private equity investors to value the business accurately.

How can historical technical defaults under the Companies Act be resolved?

Under Section 441 of the Companies Act, 2013, any non-compliance or offense not punishable with imprisonment only (or imprisonment and fine) can be compounded by the Regional Director (RD) or the National Company Law Tribunal (NCLT). Filing a voluntary compounding petition before an inspection or inquiry notice is issued significantly reduces financial penalties and shields directors from disqualification.

What are the statutory consequences of non-compliance with Section 185 (Loans to Directors)?

Under Section 185 of the Companies Act, 2013, advancing loans, providing guarantees, or providing security to directors or interested entities is strictly regulated. Violations attract severe penalties: a fine between ₹5 Lakhs and ₹25 Lakhs on the company, and imprisonment up to 6 months or fine between ₹5 Lakhs and ₹25 Lakhs on the director or beneficiary.

Why is FEMA compliance crucial during foreign equity investment due diligence?

Under FEMA regulations, foreign capital inflows must strictly adhere to sector-specific FDI caps, entry routes (Automatic vs Government route), and mandatory fair market valuation pricing guidelines certified by a Chartered Accountant or Merchant Banker. Failure to report in Form FC-GPR on the RBI FIRMS portal renders the share allotment irregular and subject to heavy compounding penalties by the Reserve Bank of India.

STATUTORY ADVISORY DESK • PRACTICE INQUIRIES

Statutory Inquiries & Practice Advisory

In strict conformity with ICAI Council Guidelines No. 1-CA(7)/06/2004, professional engagements for Compliance & Due Diligence are accepted following formal conflict verification and statutory documentation. Contact our registered practice offices for procedural guidance.

Contact Practice Office +91 99140-14949