Regulatory compliance, due diligence and advisory
What keeps a private company's paperwork able to survive an audit or a diligence exercise reaches past the Companies Act: FEMA, GST, and the Labour Codes all apply in parallel. The Four Labour Codes alone rewrote a large share of this in the last year.
What a due diligence or compliance audit actually checks
Whether it's run ahead of a transaction or as a periodic internal review, a legal and compliance review of an Indian private company typically covers: incorporation documents and statutory registers; the ROC filing history and overall Companies Act compliance status; licence validity and renewal conditions; employment records, including PF/ESI compliance and contract-labour exposure; tax filings, assessments and any open litigation, alongside FEMA obligations; environmental and land clearances where the business is sector-relevant; and, increasingly, data-protection posture for any digital business.
A periodic internal compliance audit, run outside a transaction context, is typically broader than the statutory secretarial audit covered in Guide 3. It spans Companies Act governance alongside GST, the Labour Codes, and FEMA, and can run on a quarterly internal cycle with an annual external review layered on top.
Beyond the Companies Act: FEMA, GST, and the Labour Codes
The Four Labour Codes came into force on 21 November 2025, consolidating 29 separate central labour laws into four: the Code on Wages, the Industrial Relations Code, the Code on Social Security, and the Occupational Safety, Health and Working Conditions Code. There was no transition window: they took effect on the notified date. The change that reaches every payroll: "wages" now has a uniform statutory definition, and if allowances and other exclusions push past 50% of total remuneration, the excess is added back for calculating provident fund, gratuity and retrenchment compensation, which has pushed many companies to restructure salary breakups so basic pay is at least half of total compensation. Separately, the factory-applicability threshold under the new OSH Code rose from 10/20 workers (with/without power) to 20/40, and the worker-count threshold for mandatory standing orders and for requiring government permission before layoff, retrenchment or closure rose from 100 workers to 300.
On the FEMA side, the standing obligations continue unchanged by this recent wave: FC-GPR (allotment to a non-resident) within 30 days of allotment, FC-TRS (resident-to-non-resident share transfer) within 60 days, and the annual FLA return by 15 July for any company carrying foreign assets or liabilities as of the preceding 31 March. The September 2025 GST rate restructuring changed rates and classification, not registration thresholds. The general registration threshold remains ₹20 lakh under Section 22, with an enhanced ₹40 lakh threshold for a business dealing exclusively in goods under Notification No. 10/2019-Central Tax, subject to conditions and state or union-territory-specific exclusions. The threshold that actually applies depends on the state or union territory and the specific notification in force, so confirm the figure for your specific state before relying on it.
How an advisory engagement is usually scoped
Most engagements start one of two ways: a one-time compliance health check, often run ahead of a fundraise or a transaction, or an ongoing retainer covering the recurring filings, register maintenance and a standing compliance calendar. The distinction that matters for pricing and pace: compliance work is deadline-driven and largely mechanical; advisory work is judgment-based: restructuring a salary breakup for the Labour Codes' wage definition, or checking whether the new DPIIT thresholds change a startup's eligibility, and priced accordingly.
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This page is general information, not professional advice. Indian corporate law positions and MCA rules change frequently, and how any of this applies depends on your company's specific facts. Take professional advice before acting on anything on this page. We are happy to be that adviser, but we do not act on a web page, ours or anyone else's, without one.