Statutory Complaince and Due dillegence services

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What is due diligence?

An investigation, audit, or review is performed to confirm compliance with one or more statutes or details of a matter under consideration. In the world of finance, due diligence regimes an examination of compliance and filing records before or during a proper engagement of a party as a service vendor.

Key takeaways – 

  • Due diligence is a systematic way to analyze and mitigate risk from a business or contracting decision.
  • Corporations need to conduct due diligence on all existing and potential service or sensitive materials vendors using readily available public information, by engaging due diligence partners like Versutus.
  • The due diligence strategy works on several other aspects of a company’s overall legal compliances as well.
  • Due diligence involves examining a company’s vendors, comparing the degree of acquiescence over time, and benchmarking them over those of competitors.
  • Due diligence is applied in many other contexts, for example – while conducting a background check on potential employees joining the system or as simple as reading product reviews.

Why Due diligence?

It is a process predominantly used by manufacturing corporations to assess legal risks. In simple terms due diligence is an effort to analyze information and assess risks before making a decision on engaging a vendor, expanding a potential vendor empanelment, compliance portfolio, or executing an expansion drive.

It also includes examining the service provider’s statutory returns, comparing their progressive patterns over a period of time, and analyzing them by benchmarking them with those of their competitors at a specific period of time to assess to exclusively safeguard the company from any likely pitfalls.

How does one interpret the purpose of due diligence?

In real terms, be it, vendor, due diligence, or investment due diligence, it is primarily the method to reduce exposure to risks at all times. It is a procedure by which all the parties concerned with a particular transaction or service contract are aware of all the risks and details before they give their consent to a deal.

Common Issues That Can Arise During the Due Diligence Process

During the process of due diligence, the keynotes need to be kept in mind so that each of these will be investigated before making or breaking the final deal. 

Organizations could be at their peak of operations, but if the conformity of vendors and employees to all applicable rules and laws doesn’t fill properly, then regardless of its supposed importance in the grand scheme of things, having them on-board could be a show spoiler. 

 Besides, if the governmental authorities don’t feel absolute confidence in your organization, they probably won’t move ahead with the clearances that are much required. Let’s take a look at what red flags may crop up during the due diligence process and how you could address them before it starts. 

Contracts/Agreements: All employees and vendors should have legally binding agreements in place. Young companies may operate in a less clear-cut fashion, relying on handshake agreements or insufficient contracts. This could pose a concern, since all we typically want is to have everything in writing, clearly outlining the agreed scope, compensation, and duties of employees, and vendors. We at Versutus always press on having a contract in writing before the commencement of the engagement.

Lack of precise Documentation: It’s of priority to make sure that all crucial factors that determine the value and compliance of a company are recorded and are verifiable. Sometimes startups don’t have an efficient record-keeping system or may not have ready access to their parents, partnership agreements, or balance sheets. Creating a data system and storing all important documents should be a priority for startups. 

Lack of Resources: It would be hard to allocate the time and resources needed for due diligence. To reduce the chances of the due diligence process needlessly dragging and having any negative effects on your workforce, it’s important to keep the team engaged and involved. It may seem like you’re alone in the whole process, and it can be hard to rely on vendors. This is where Versutus could support. Versutus assures that you are kept well-informed and we help in understanding how the process works and why certain steps need to be taken; this allows delegation and increases the efficiency of your responses to the demands of due diligence.

Potential Benefits of Due Diligence for Organisations

Even though due diligence is typically carried out to limit their risk of non-compliance or non-adherence to all applicable rules and regulations, it can also offer huge benefits for organizations being audited. Due diligence is an impartial and detailed assessment of where the enterprise is at and will give a good breakthrough of its strengths and weaknesses.

Due diligence may seem like an intimidating prospect. However, it’s important to keep in mind that it’s a normal and even essential part of any service/employment deal. 

Performing soft due diligence –

As Due Diligence Assurance Partners, Versutus can help you in getting out from asking to produce a massive amount of documents and have hundreds of talks and meetings with the vendors and potential employees. If everything checks out, you could be looking at a bright and exciting new phase in your organization’s growth trajectory. 

Conducting soft due diligence is not based on any formulae or service, rather it is on how a specific work set of individuals and corporations bond with the company’s culture.

Recently, soft due diligence has also been conducted on the customers of an organization. Even after the vendors take up the cultural and operational shifts in the behavior, still, the customers may not well adapt to the compliance change in service, product, or an approach. This is exactly why Versutus conducts the stakeholder analysis on customers, suppliers, and test markets.

Hard due diligence – overview

Hard due diligence is concerned with numbers while soft due diligence is concerned with people both within the campus and outside such as their customer base.

Under the practice of traditional service providers and manpower suppliers, the corporations deploy risk analysts who perform due diligence by studying compliance, documentation, structures, and liabilities. Versutus has had a deep experience of over 10 years in such due diligence.

The contemporary business analysts call this element “human capital diligence”. The corporate element started to be noticed only from the mid-2000s. To be more precise, the Harvard business review dedicated a part of its April 2007 issue to what was getting more popular “human capital due to diligence” warning companies who ignore their peril.

Due diligence basic for startups

In the world of start-ups, the term due diligence refers to an audit of a company that is performed in order to discover possible business liabilities or deficiencies in light of a business transaction, such as manpower supply. Due diligence offers a systematic way for firms to analyze and vet startups in order to mitigate uncertainties and risks before they decide to engage them as service providers.

The Financials 

For investors, the past financial performance of your company is the best indicator of future performance, more so than your forecasts and predictions. They’ll want to take a deep dive into your financial statements, scrutinize any debt you have accrued, and check your agreements with existing partners. 

Just because a company does not have a viable track record does not mean it is not possible to understand beyond. Here are some startup specific moves –

  • Include or exit strategy.
  • Consider a partnership setup.
  • Figure out a strategy for merchant compliance
  • Choose a start-up with a promising service lineup.

Other examples of hard due diligence include – 

  • Reviewing and auditing financial statements.
  • Scrutinizing returns and challans.
  • Analyzing the adoption of statutory changes.
  • Reviewing trust considerations.
  • Evaluating subcontractor and third-party relationships.

At Versutus, with our experience spanning over a decade and also the expertise along with knowledge know-how, we ensure to have the best practice put forward at the time of conducting due diligence. Our team is equally committed to stretching beyond expectancy in crashing deadlines with ease and handling cumbersome processes incurred with ease.

We would ask all organizations to run through Due diligence while carrying the production process or while onboarding a new facility to anything that might require any new projection to have all factors included always.



A result driven skilled finance professional, having completed Masters in Business administration with 3+ years of experience having successfully advised multinational corporations and SME businesses in the areas of statutory compliances, due diligence, indirect taxation, HR processes and compliance risk management. A young mind with the energy to resolve cumbersome processes in the smooth functioning of the organisation and the urge to implement a complete solution to accelerate performance sums what keeps Sudha going.

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