Investment Compliance services
in Bangalore

What is investment compliance?

You can raise the capital for your business by inviting investors, either from India or abroad. However, there are many regulations and compliance factors involved in getting an investment. There could be many legal implications if the funding doesn’t meet the mandatory investment compliance regulations. Therefore, you need to consult a professional when you’re inviting an investor to fund your business. Set My Company offers personalised investment compliance services in India based on your business model and business goals.

Funding Compliances for Indian Companies

Rights Issues of Shares

This process should be done when you’re getting additional funds from existing shareholders. It is the easiest and quickest way of gaining investment.

Preferential Allotment

Also known as Private Placement of Securities, this method needs to be followed while receiving funds from an investor (or group) who are not the existing shareholders. A lot of paperwork and documentation needs to be done during this process. So, it would be best if you avail of our investment compliance services in India.

Issue of Convertibles or Debentures

This process is done by private placement of securities and depends on the long term plans of the investment company.

RBI Compliance

The external borrowings need to be in accordance with FEMA guidelines and RBI regulations. If you are receiving foreign funds for your company, then you need to follow a 2-stage reporting process. You need to file the Advance Reporting Form and the FC-GPR forms within the specified timeline. Also, you need to submit the annual report of the funds that your company received during the financial year.

Funding Compliance for Start-ups in India

The general investment compliances for a start-up business in India are:

Should have subscription agreement and shareholder agreement
Should have a term sheet with details such as valuation of the company, investor’s profile, type of security, amount of investment, details of decision makers, exit strategy
Should have a capitalization table
Should be ROC compliant
Should be ROI Compliant

Registrar Related and Non-Registrar Related Compliance

Registrar-Related Compliance

  • 1Form MBP- 1 – In the first meeting of the Board of Directors, each director needs to submit his/her interest in other entities. Every time the entities change, the form needs to be updated.
  • 2Form DIR – 8 – Every financial year, every director needs to file the Company disclosure of non-disqualification.
  • 3E-form: MGT-7 – In small companies, the annual returns need to be filed within 60 days of conducting the Annual General Meeting. The returns need to be filed for the year from April 1 to March 31.
  • 4E-form: AOC-4 – Financial statement with profit and loss account, balance sheet, auditor’s report, director’s report, Annual General Meeting notice
  • 5Director’s Report
  • 6Circular of Financial Statement and other documents to all shareholders
  • 7Annual General Meeting notice prepared as per Secretarial Standard – II and Companies Act 2013 (Section 101) and circulated to the director, members, and statutory auditor
  • 8E-form ADT-1 – Auditor to be appointed for 5 years

Non-Registrar Related Compliance

  • 1Tax audit report filing
  • 2Income tax reports filing
  • 3Quarterly TDS returns
  • 4GST returns filing (quarterly or half-yearly)
  • 5Payment of GST, TCS, TDS
  • 6Periodic assessment as per law

Pre Funding and Post Funding Compliance Checklist

Pre Funding Checklist

SEBI (Alternative Investment Funds) Regulations, 2012 (amended in 2013) has denoted certain compliance factors for obtaining funds from angel investors. Before you go to an angel investor to request for funding, here are some compliance points that you need to keep in mind:

Your company should be incorporated within three years of establishment
Your company should not be listed in the stock exchange
The annual turnover should be less than Rs. 250 million
Your company should not be associated or promoted by any company or industrial group that has an annual turnover of over Rs. 3 billion
The ticket size of the deal needs to be from Rs 5 to 50 million
Your company should be compliant with the Registrar of Companies
Should have conducted Board Meeting regularly and minutes of meetings maintained
An Extra Ordinary General Meeting needs should be held
All the Board Members need to approve the proposal for requesting angel investors for capital
Offer letters need to be issued to the angel investors
Within 30 days of issue of the offer letter, the Preferential Allotment record needs to be filed with the Registrar of Companies

Compliance maintenance can be difficult and tedious. Even the smallest rule and regulation may have a huge impact on you gaining capital for your business. So, preferably avail investment management services offered by Set My Company.

Post Funding Compliance

Now that you have issued the offer letters and filed the record of Preferential Allotment with the Registrar of Companies, you need to start working on the allotment of shares to investors. In case, you have any difficulty with these post-funding compliance measures, we suggest you avail of the investment compliance services in India offered by Set My Company.

Here’s the checklist of post-funding compliance with the Registrar of Companies for start-ups

All the board members of the private limited company need to pass a resolution regarding the allotment of shares in a board meeting
The shares need to be allotted within 60 days of receiving the funds
Within 30 days of receiving the funds, the return of allotment has to be registered with the Registrar of Companies
The return of allotment needs to have the name and addresses of the shareholders. It should also have details regarding the percentage of shares.
After the allotment process is completed, the company can issue share certificates to the investors

The checklist for post-funding compliance with the Reserve Bank of India is as follows:
This compliance is essential for companies in India that are receiving funds from foreign investors.

Within 30 days of receiving the fund, the company needs to submit a fully filled Advance Reporting Form to the Reserve Bank of India. This form will require details such as the name and address of the investor, date of receiving the funds, amount of investment received, and KYC of the overseas investor. The company should also provide any relevant documents regarding government approval as well as the details of the financial institution through which the funding was received.

Within 180 days of receiving funds, the company has to issue the shares. Else, it will be considered as a violation of the Foreign Management Act (FEMA) regulations.

Within 30 days of issuing shares, the company has to submit the FC-GPR form to the Reserve Bank of India.

Why SetMyCompany for Invest Compliance Service?

You have a great business idea, but to bring the business idea to life, you need the perfect business model. Don’t get tangled in the tedious legalities and compliance. All you need to do is avail our compliance outsourcing services. Set My Company offers the best investment compliance services in India. We have been in the business of helping entrepreneurs set up a successful business based on their business ideas.

Set My Company offers end-to-end investment management services, from drafting a legal agreement to designing the investor’s pitch and helping you meet the compliances. Focus on your core business idea and let us handle all the compliance details. Just one phone call can turn your business idea into a company. Call +91 96111 89911 (IN) right away.

FAQs

It can be described as an agency or a firm that offers investment management services. The firm advises or provides counsel in exchange for a fee.

The compliance regulations are complex and depend on various factors and parameters. Not meeting the compliance regulations can have an adverse effect on your business. When you outsource compliance services, you get the services of experts who can guide your investment policies based on regulations and compliances. It will help you make the most of your funding and also avert any legal issues.

  • To effectively monitor investment guidelines and goals
  • To ensure that the capital investment is in compliant with the regulations set by the Reserve Bank of India and the Registrar of Companies
  • Detect and address issues related to non-compliance and investment breaches
  • To provide detailed reports regarding compliance with the shareholders, stakeholders, and government agencies

Yes, it is worth availing investment compliance services in India. There’s an old proverb that says “A stitch in time saves nine.” Similarly, availing experts advise and recommendations on compliance in the early stages will help you save a lot of money and effort in the long run.

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