What is a No Dues Form in India?

Question

As part of prospective vendor due diligence, I am reviewing the SOC 2 audit report for a vendor our company is thinking of using. In the report, there were references to a "no dues report". This company is based in India.

I am not familiar with what such a form is, and why it would be important to reference in a formal audit report. However from the research I did, it appears to b a document used when terminating an employee, used to evidence that the employee left without being obligated to the company in any way.

What is a no dues report as used in India?

Answer 1

Your assumption is on the right track. A no-dues form, duly signed by the employee as well some of the people they have worked with, is confirmation that they employee has handed over all company assets as well as paid in full all amounts that they owe the company (think travel expense reimbursements and equipment such as phones or SIM cards).

This is an important document for both parties as it ensures that the Full and Final Settlement will be completed without hassle after the departure of the employee.

This document is also called as a No-Objection-Certificate in some places and is a common practice in many organizations, not just when it comes to employment but other places as well. For instance, a library might ask for a no-dues certificate when you decide to end your membership there. This is to certify that all borrowed books have been returned and all fines have been paid.