Fundraising Compliance

Proper compliance ensures:

• Legitimacy of capital raised
• Investor confidence and transparency
• Smooth audit and due diligence processes
• Eligibility for future funding rounds and government schemes

• Secure Initial Capital
  To cover product development, setup costs, and early-stage operations.
• Scale Business Operations
  To expand teams, increase production, and enter new markets.
• Attract Top Talent
  To offer competitive compensation and retain skilled professionals.
• Invest in R&D
  To innovate, refine offerings, and stay ahead of market trends.
• Enhance Marketing & Customer Acquisition
  To build brand visibility and grow the customer base.
• Upgrade Infrastructure & Technology
  To ensure operational efficiency and long-term scalability.
• Explore Business Expansion
  To launch new products, enter new geographies, or open additional units.
• Form Strategic Partnerships
  To gain mentorship, industry connections, and business opportunities.

Key Checklist Items

• Define Funding Objectives
  Clearly outline capital requirements, usage plans, and fundraising targets.
• Prepare a Business Plan
  Include vision, market size, competition, financials, and growth roadmap.
• Build a Committed Core Team
  Ensure founders and key personnel have relevant experience and roles.
• Identify Suitable Investors
  Research and shortlist VCs or angel investors aligned with your sector and stage.
• Ensure Financial Documentation is Ready
  Maintain updated P&L statements, cash flow projections, and cap tables.
• Establish Online Presence
  Set up a professional website and maintain active, credible social profiles.
• Practice Pitching
  Refine your pitch deck and rehearse with mentors or advisors.
• Seek Expert Guidance
  Engage advisors for mentorship and legal due diligence.
• Attend Networking Events
  Participate in demo days, pitch events, and investor forums.
• Follow Up with Investors
  Send personalised updates post-meeting and maintain engagement.

Key Requirements

• Compliance with RoC Norms
  Ensure the company is compliant with the Companies Act, 2013 and all Registrar of Companies (RoC) filings are up to date.
• Board Meeting Resolution
  Issue notice at least 7 days in advance. Approve key items such as:
  • Valuation report
  • Offer period and number of allottees
  • Opening of a separate bank account for funds
  • Draft offer letter for private placement
  • Date and agenda for the Extraordinary General Meeting (EGM)
• Extraordinary General Meeting (EGM)
  Conduct an EGM to pass a Special Resolution for preferential allotment.
  • File Form MGT-14 with RoC
  • Distribute Form PAS-4 with the offer details and certified true copy of the resolution
• Issuance of Offer Letters
  Share the offer letter (Form PAS-4) within 30 days of approval to the identified investors via physical or electronic mode.
• Maintain Allotment Records
  Keep a complete record of allotments and file it with the RoC before accepting funds.

Key Post-Funding Compliance Requirements

• Allotment of Shares & Filing Return
  Allot shares to investors within 60 days of receiving funds.
  File Form PAS-3 (Return of Allotment) with the Registrar of Companies (RoC) within 30 days of allotment.
• Issuance of Share Certificates
  Issue share certificates to the new shareholders within 60 days from the date of allotment.
  Funds received cannot be utilized until share certificates are issued.
• Compliance with Banking Norms
  Share application money must be received via banking channels only from the investor's account, ensuring traceability and legal compliance.
• Reporting to RBI (For Foreign Investments)
  Submit Advance Reporting Form within 30 days of receiving funds from foreign investors.
  File Form FC-GPR within 30 days of share issuance, along with:
  • Certificate from Company Secretary (compliance with FDI policy)
  • Certificate from a professional (valuation justification)
• Companies Act Compliance
  Maintain statutory registers, file necessary forms, and adhere to all relevant procedures under the Companies Act, 2013.

Key Compliance Requirements

• RBI Regulations for Foreign Investments
  All foreign investments are governed by the Reserve Bank of India (RBI). Startups must follow applicable FEMA and RBI guidelines to ensure legal compliance.
• Advance Reporting to RBI
  File an Advance Reporting Form within 30 days of receiving foreign funds. Include:
  • Investor details (name, address, nationality)
  • Amount and date of remittance
  • Bank or authorised dealer details
  • Government approvals (if applicable)
  • KYC documents of non-resident investors
• Share Issuance Timeline
  Shares must be allotted to foreign investors within 180 days of receiving the funds. Non-compliance may lead to FEMA violations.
• Filing of FC-GPR
  Submit Form FC-GPR within 30 days of share issuance. Attach:
  • Certificate from a Company Secretary (FDI compliance)
  • Valuation certificate from a practising professional
  • Board resolution and relevant supporting documents
• Companies Act Compliance
  Follow procedures for share allotment, file necessary RoC forms, and maintain statutory registers as per the Companies Act.

Our Services Include

• Expert guidance on fundraising regulations under RBI and RoC
• Legal and financial due diligence to ensure full regulatory compliance
• Preparation and filing of compliance documents such as:
  • Share allotment forms
  • Reporting forms (PAS-3, FC-GPR)
  • Certification and supporting documentation
• Investor reporting support, including regular updates and compliance records
• Advisory on corporate governance practices and internal control frameworks
• Compliance support for foreign investments, including FDI norms and RBI reporting