Due Diligence of NBFC (Non Banking Financial Company) By CS Shubham Katyal
NBFC remains for a non-banking financial company registered under section 45-I of Reserve Bank of India Act, 1934. This is an essential piece of financial service Industry in the nation, creating and deploying fund for infrastructure to micro and small-medium sized industries in India. It’s a somewhere part of the alternative source of funding for various business and other needs of people.
- Company Information
- Date of Incorporation
- Authorised Capital
- Paid up Capital
- Date of Last Annual General Meeting
- Date of Last Balance Sheet
- Status of the Company
- Director Information
- Directors of the Company
- Date of Appointment of Directors
- Charges Registered
- Details of Secured Lenders of the Company
- Quantum of Secured Loans
- Certificate of Incorporation
- Memorandum of Association
- Articles of Association
- Minutes of Meetings & Secretarial Compliance
- Filling of FC-gpr, ARF.
- Other necessary requirements.
- Verification of bank statements
- Verification and valuation of all assets and liabilities
- Verification of cash flow information
- Verification of all financial statements against transactional information
- Legal due diligence for all real estate properties of the company.
- No objection from Secured Creditor for transfer of the company.
- Verification of court documents and court filings, if any.
- Business Model
- Number of Customers
- Number of Employees
- Production Information
- Vendor Information
- Income tax return filed
- Calculation of income tax liability by the company
- ESI / PF Returns Filed
- Service Tax / VAT Returns Filed
- TDS Returns
8. Material Agreements
9. Intellectual Property Rights
10. Regulatory Matters i.e., in this case, RBI compliance records.
- Compliance with Section 45-IC i.e. Creation of Statutory Reserve @ 20% profit
- Registration to FIU-IND
- Membership of Credit Information Company (CIC)
- Auditor Report to Directors based on circular DNBS (PD) CC No. 129/03.02.82/2008-09 dated September 23, 2008 (now it's 2016) & Statutory Auditor Certificate (SAC)
- Registration of Company with Central KYC Portal
- Registration with information Utility set up under IBC, 2016
- Appointment of Nominated Counsel in Delhi High Court