Due diligence is a structured investigation of a target business before an investment, acquisition or partnership. It covers corporate records, contracts, litigation, intellectual property, licences, employment, financial statements, tax positions and regulatory compliance. Findings shape the price, deal structure, conditions and warranties in the transaction documents.
Legal due diligence
- Incorporation, share capital and ROC filings
- Material contracts and change of control clauses
- Litigation and notices
- IP ownership and registrations
- Licences and regulatory approvals
- Employment and labour compliance
Financial and tax due diligence
- Quality of earnings and working capital
- Debt, contingent liabilities and related party transactions
- Income tax, GST and TDS compliance and disputes
Process
- Sign an NDA and share a checklist.
- Target populates a data room.
- Review, queries and management calls.
- Report with findings and recommendations.
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Get expert help →Using the findings
Red flags lead to price changes, conditions precedent, specific indemnities, escrow or, in serious cases, walking away.
Frequently asked questions
How long does due diligence take?
For small businesses, a few weeks. For larger or regulated businesses, it can take longer, depending on data room readiness.
Who pays for due diligence?
Usually the investor or buyer pays its advisors, while the target bears its own costs of preparing information.
What is vendor due diligence?
The seller commissions a due diligence report in advance to identify and fix issues and speed up the sale process.
What are common red flags?
Unfiled ROC returns, unrecorded share transfers, tax demands, missing licences, IP owned by founders personally and undisclosed related party dealings.
Let Leegal handle your Due Diligence
Documentation, filing and follow-up by a dedicated expert, so you can focus on running your business.
- Dedicated point of contact
- Transparent pricing
- Pan-India service