2. What do we understand by Due Diligence?
• It is the process of carrying out an investigative analysis of the
financial, legal and operating activities of an entity in
connection with a proposed transaction that would result in a
significant change in the ownership or the capital structure of
the entity.
• Aim of the due diligence process is to identify problems
within the business, particularly any issues which may give
rise to unexpected liabilities in the future.
3. Why Due Diligence is important?
• To create a trust between two unrelated parties
• To identify potential deal killers defects in the target and avoid a bad
business transaction.
• To gain information that will be used for
Valuing assets
Representations & Warranties for Indemnification
Negotiating Price Concessions
• To verify that the transaction complies with investment or acquisition
criteria.
• To investigate & evaluate a business opportunity
• It involves an analysis carried out before acquiring a controlling interest in
a company
4. Necessary Documents for Due Diligence
• Title Documents- Sale Deed, Mother Deed, Conveyance Deed,
etc.
• Records of mutation entry maintained by revenue officers as
title search has to be taken at the office Sub-registrar in urban
areas for last thirty years.
• Katha Certificate and Extracts.
• Mutation Register Extracts.
• Joint Development Agreement.
• General Power of Attorney.
5. • Building plan sanctioned by the statutory authority.
• NOC from electricity Dept./ Pollution Control Board/
Water Works/ Airport Authority etc.
• Supplementary agreement/ Ratification Deed (if any).
• Allotment letter from the builder/ Co-operative
Society/ Housing Board/ BDA.
• If any loan on the property (current or past)/ Original
property Documents with bank.
• Own contribution receipt along with the bank
statement.
6. • NOC from the society/ building Association.
• No-due certificate from the building association.
• Approved plan of construction/ extension & license
for construction.
• Detailed cost estimate/ valuation report from
Chartered Engineer/ Architect (if possible)
• Conversion order/ Betterment Charges paid receipt.
• Sanctioned Layout Approval plan.
• Non- encumbrance Certificate.
• Release Deed (if applicable).
7. • Completion Certificate.
• Occupancy Certificate.
• Loan/ Charge/ Mortgage/ by the Builder.
• Deed of Declaration.
• Latest Electricity Bill.
• Pan card of the owner/ owners of the premises.
• Address proof of the owner/ owners of the premises.
• Declaration made by the promoters, if any.
• Memorandum of Association.
