ESOP Due Diligence Prep for Funding and M and A in Delhi

Picture a Nehru Place SaaS company or a Connaught Place fintech that has just countersigned a term sheet from a Singapore-based NRI fund. The product is strong and the round is agreed, yet the option records were last touched two years ago, one MGT-14 was never lodged, and the cap table in the deck does not match the registers. None of that mattered until now. The moment the offshore investor's counsel opens the data room, those gaps become the conversation, and across time zones they turn weeks of legal diligence into months. Patron Accounting closes that exposure first: we audit the ESOP records the way a cross-border acquirer will, remediate every defect, and hand back a data room that diligence merely confirms.

This matters more in Delhi than almost anywhere. RoC Delhi and the Ministry of Corporate Affairs head office sit in the capital, so the registrar applies the filing rules to the letter, and the NRI and overseas capital that funds so many Saket, Aerocity and Connaught Place companies leans on documents over relationships. ESOP defects never announce themselves when they are made; a scheme passed by board resolution alone, a grant given over email, a register quietly abandoned, all of it stays hidden until an investor's auditor goes looking. We find it before they do, while it is still cheap and fast to fix.

An NRI-backed Aerocity deal and a domestic Connaught Place round ask the same four questions of an ESOP data room, but the offshore reviewer presses each one harder and wants the document, not the assurance. Here is the order the diligence usually follows:

• The reconciliation: does the cap table in the deck tie, line for line, to the statutory registers, the resolutions and the signed grant letters?
• The approvals: did a shareholder special resolution clear the scheme, and was MGT-14 lodged at RoC Delhi inside the 30-day window?
• The register: is the SH-6 complete and current, capturing every grant, vesting event, exercise and forfeiture without a break?
• The valuations: is there a registered-valuer FMV at grant and at each exercise, with every historic allotment supported?

In a capital-region round, the offshore investor's counsel works the data room from the cap table outward, then tests each number against the RoC Delhi filing history. These are the defects that show up most often in Nehru Place, Connaught Place and Saket deals, listed roughly in the order they get caught:

For a Delhi company heading into a cross-border round, the engagement is built around what an offshore reviewer will ask for and the RoC Delhi filings they will cross-check it against:

• ESOP compliance audit: a full review of the scheme, resolutions, MGT-14 and PAS-3 filings, SH-6 register, valuation history and grant letters against the diligence checklist.
• Cap-table reconciliation: the cap table tied to the statutory registers, board resolutions and grant records, with every discrepancy traced to its source and resolved, the line offshore counsel tests first.
• Filing remediation: the overdue MGT-14 and PAS-3 returns lodged with RoC Delhi, late fees managed and defective approvals regularised.
• Valuation clean-up: the missing registered-valuer FMV reports obtained for grants and exercises, and historic valuation exposure addressed.
• Data-room pack: a clean, indexed ESOP pack so diligence runs fast and every answer is ready for a cross-border review.

The friction in a Delhi-NCR deal is usually less about the law than about timing and distance, an offshore investor reviewing across time zones, a closing date that will not move, and filings that should have gone to RoC Delhi years ago. Here is how each plays out and how we clear it:

All fees and charges listed are indicative only and do not constitute a binding offer. Final amounts may vary depending on the volume of work and the complexity involved.

Professional service charges for drafting, filing, and representation are separate from the statutory fees. The exact fee depends on the complexity of the case, disputed amount, and number of hearings required. Contact us for a detailed quote.

Get a free ESOP Due Diligence Prep consultation - Call +91 945 945 6700 or WhatsApp us. No-obligation assessment.

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Patron Accounting LLP is a CA and CS firm with 15+ years on ESOP compliance, ROC filings, valuations and deal-readiness for funding and M and A.

From our Delhi presence we work with founders across Nehru Place, Connaught Place, Saket and the Aerocity corporate belt, and with offices in Pune, Mumbai and Gurugram we serve businesses across India, both in-person and remotely.

Every fix below is run through RoC Delhi, the same registrar an offshore investor's counsel will cross-reference, so the cured record stands up to a cross-border review rather than just looking tidy on paper. We work the list in deal-priority order, starting with whatever the diligence will hit first.

A Delhi company answers to RoC Delhi, which sits in the same city as the Ministry of Corporate Affairs that writes these rules, so there is little margin for a generous reading in diligence and the statutory expectations below are applied to the letter, especially when offshore counsel is checking each one against the public filing record.

Approval and filing: an ESOP scheme requires a special resolution under Section 62(1)(b), with MGT-14 filed within 30 days and PAS-3 on allotment after exercise; missing or late filings are the most common diligence findings.

Register: Rule 12(10) requires an SH-6 register recording all grants, vesting, exercise, lapse and forfeiture, available for inspection when diligence opens.

Valuation: a registered-valuer fair value is required at grant and at exercise, and any past allotment without a Rule 11UA valuation can carry historic Section 56(2)(viib) exposure.

Remediation routes: late filings are regularised with the applicable late fees, and where older defaults remain, condonation or compounding routes under the Companies Act resolve them.

Authoritative sources: the Ministry of Corporate Affairs (Section 62, Rule 12, MGT-14, PAS-3, SH-6), the Companies Act, condonation and compounding provisions, and the Income Tax Department (Rule 11UA valuation, Section 56).

Delhi companies file at RoC Delhi, which sits in the same city as the Ministry of Corporate Affairs head office. Every retrospective MGT-14, PAS-3 and SH-6 remediation, and any condonation or compounding for older defaults, is processed through RoC Delhi, so we run the clean-up with the local registrar's process and timelines in mind.

The gaps we see cluster by area:

• Nehru Place IT hub: long-running IT and software companies that introduced an ESOP pool late, often with board-only approval and no special resolution on file.
• Connaught Place finance district: companies raising structured rounds where investors expect the cap table to tie exactly to RoC filings and the SH-6 register.
• Saket and Aerocity corporate belt: consumer, D2C and edtech startups with multiple exercise rounds where PAS-3 filings and FMV valuations have fallen behind.

With angel and VC diligence in Delhi typically running four to eight weeks after the term sheet, beginning the ESOP prep at term-sheet stage is what keeps a Nehru Place or Saket round on its agreed timeline and valuation.

This is the one ESOP service where the clock is already running: the term sheet is signed, diligence is days or weeks away, and the gaps that took years to accumulate have to be fixed in that window. Every day of delay narrows the room to remediate cleanly and raises the chance that the investor finds the gap first, on their terms. The moment a round or a sale is on the horizon, get the ESOP records audited and fixed, so diligence confirms a clean house rather than uncovering a messy one.

ESOP gaps are silent until diligence, and then they are loud, costing valuation, time and sometimes the deal. Preparing in advance turns that risk into a non-event.

Patron Accounting LLP, a CA and CS firm with 15+ years of ESOP and deal-readiness experience, audits your scheme, filings, registers, valuations and cap table against what investors check, remediates every gap, and hands you a clean ESOP data room, so your funding round or acquisition closes on time and at the value you agreed.

Start with the national ESOP Due Diligence Prep for Funding and M&A service, then explore complementary ESOP services across India.

• ESOP Due Diligence Prep for Funding and M&A in India - the national parent service
• ESOP Services Hub - the full ESOP advisory hub - route by stage, scenario or tax
• ESOP Scheme Design - design the option pool, vesting schedule and leaver terms
• ESOP Valuation Services - Rule 11UA fair-market-value reports for grants and exercises
• ESOP Corporate Filings - MGT-14, PAS-3 and Form SH-6 register filings
• ESOP Perquisite Tax (Sec 17(2)(vi)) - perquisite tax and TDS computation at exercise

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