The US investor due diligence checklist for India-run startups

1. Corporate records (Delaware)

• Certificate of incorporation and every amendment; bylaws.
• Board and stockholder consents for every share issuance, option grant, SAFE and major contract.
• A current certificate of good standing — which requires franchise tax and annual reports to be up to date.
• Registered agent in place and foreign qualifications in states where you have employees or offices.

2. Equity and cap table

• A cap table that reconciles to board approvals, stock ledger and share certificates.
• Founder stock purchase agreements with vesting, and proof of timely 83(b) elections where relevant.
• All SAFEs and convertible notes, with a conversion model — see SAFE notes.
• An option plan approved by the board and stockholders, grants priced on a current 409A valuation.
• If the company converted from an LLC, the conversion documents — see LLC to C-Corp.

3. US tax and state compliance

• Filed Form 1120 for every year since incorporation — including zero-revenue years.
• Form 5472 for each year with foreign related-party transactions (founder capital counts).
• Delaware franchise tax paid on the right method — see the franchise tax guide.
• Forms 1099 and 1042-S where you paid contractors or foreign persons; payroll filings if you have US employees.
• A sales-tax nexus review if you sell into US states.

4. India-side compliance (the extra checks)

• Founders’ ODI: each India-resident founder’s investment in the Delaware company reported in Form FC through the AD bank, with Annual Performance Reports filed every year — see ODI rules.
• Indian subsidiary: FDI from the Delaware parent reported via FC-GPR (and FC-TRS for any transfers), annual FLA returns filed, and ROC compliance up to date.
• If you flipped: the share swap, valuation and ODI filings behind the flip, and the tax treatment in India.
• Transfer pricing: an intercompany agreement and arm’s-length pricing between the US parent and Indian subsidiary, with annual documentation — see transfer pricing.
• ESOPs for the India team: Form OPI filings and TDS on exercises — see US parent ESOPs.
• POEM: evidence of where the US company’s key management decisions are made.

5. IP and contracts

• IP assignment agreements from every founder, employee and contractor — in both companies — assigning work to the right entity.
• If development happens in India, an intercompany agreement confirming that IP created by the Indian subsidiary belongs to (or is licensed to) the parent, as intended.
• Trademark filings in the right owner’s name — see US trademark.
• Key customer, vendor and financing contracts; any change-of-control clauses.

6. Financials

• Monthly accrual-basis financials for both entities, and consolidated figures — see US bookkeeping.
• Intercompany balances that reconcile between the US and Indian books.
• Bank statements, revenue support (contracts, invoices, deferred revenue) and a current financial model.

Building the data room

1. Organise folders by the six sections above, with a separate India folder.
2. Include a one-page compliance summary: every filing, its date and its status — use the compliance calendar as the template.
3. Disclose known gaps with a remediation plan; late FEMA filings can often be regularised and US filings corrected before closing.

Durgesh led a USD 3.75M Pre-Series A end-to-end, including diligence. See fundraising advisory.

Frequently asked questions

Please note: this guide is general information based on the rules as they stood on the review date above. Regulations and RBI/CBDT procedures change often — please get advice on your specific facts before acting.