Streamlined EQUITY SHARES ISSUANCE · Startup & Investment

Streamlined EQUITY SHARES ISSUANCE · Startup & Investment

  • 💬 TAGLINE

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₹1,999/-

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Here's How It Works

Step 1

Consultation Requirement

Our team reaches out to understand your precise requirements.

Step 2

Drafting Review

We prepare all necessary paperwork specific to your legal needs.

Step 3

Filing

Filing and rigorous follow-up with the respective authorities.

What Our Clients Say

“Lawxygen provides top-tier support. Registration timelines were strictly followed with full transparency.”

Rahul Verma

Rahul Verma

Director, TechNexus

Here's What You'll Need

💬 TAGLINE

  • Document Name
  • Notes / Format
  • Document Name
  • Notes / Format
  • Certificate of Incorporation and MoA/AoA
  • Confirms authorised share capital available for the proposed issuance · PDF
  • Current Cap Table
  • All existing shareholders, ESOPs, and convertible instruments - to verify available authorised capital
  • Valuation Report
  • SEBI-registered professional valuation - required for private placement pricing (angel tax) and FEMA compliance for FDI
  • Investor Subscription Form and KYC
  • Completed subscription form, PAN, Aadhaar, and bank details for each allottee

Why Should I Use Lawxygen for Registering a Private Company Online in India?

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Overview - equity shares issuance startup investment Registration

What is it?

Equity shares issuance is the process by which a company issues new shares in exchange for capital (fresh issue), to employees (ESOP exercise), or to existing shareholders (rights or bonus issue). Each type has specific legal requirements under the Companies Act 2013, FEMA (for foreign investors), and SEBI regulations (for listed companies). A compliant issuance process is essential for cap table integrity and future fundraising.

Types of equity issuance

Private Placement (Section 42): To a specific group (up to 200 per year) - most common for startup investment rounds. Rights Issue (Section 62(1)(a)): To existing shareholders proportionally. Bonus Issue (Section 63): Free shares from accumulated profits. ESOP Exercise (Section 62(1)(b)): To employees exercising vested options. Each type has different board/shareholder approval, pricing, and filing requirements.

Companies Act compliance essentials

Private placement requires: Board resolution, Private Placement Offer Letter (PPOL), special shareholder resolution, allotment within 60 days of subscription money receipt, and Form PAS-3 (allotment return) filed with ROC within 30 days of allotment. Violation: both company and officers face penalties under Section 42(10).

FEMA compliance for foreign investors

Equity shares issued to foreign investors (FDI) must comply with FEMA: issued at or above the FEMA-determined fair market value (pricing floor), within the applicable sectoral FDI cap, under the correct entry route. Post-allotment: Form FC-GPR filed on FIRMS portal within 30 days. Annual return FLA filed by July 15 each year.

Benefits - Benefits of Company Registration Online Using Lawxygen

Who Usually Requires This?

The EQUITY SHARES ISSUANCE · Startup & Investment solution matches perfectly with these profiles:

  • Profile
  • Why It Applies
  • Profile
  • Why It Applies
  • Startups closing equity funding rounds from domestic investors
  • Every equity fundraising round from domestic angels or VCs involves fresh equity share issuance - requiring the full Companies Act private placement procedure and ROC filings.
  • Companies issuing shares to foreign investors
  • FDI equity issuance requires FEMA pricing compliance, sectoral cap verification, and post-allotment RBI filing. Non-compliance attracts FEMA penalties of up to 3x the amount involved.
  • Companies converting CCDs, CCPS, or convertible notes to equity
  • When convertible instruments reach their conversion trigger, fresh equity shares must be issued following the allotment procedure - with Form PAS-3 filed and the cap table updated.
  • Companies allotting ESOP exercise shares
  • Employee ESOP exercises require issuance of fresh equity shares - Form PAS-3 within 30 days, share certificates issued, and shareholder register updated.
  • Companies issuing bonus shares or doing rights issues
  • Bonus issues and rights issues have their own specific Companies Act procedures requiring board approval, shareholder approval, record date fixing, and ROC filings.
  • ✅ WHY DO YOU NEED THIS
  • Key Benefit
  • Explanation
  • Key Benefit
  • Explanation
  • Non-Compliant Allotments Can Be Invalidated
  • Equity shares issued without following the Section 42 private placement procedure are non-compliant and can be challenged - creating serious cap table integrity issues that surface in future fundraising due diligence.
  • FEMA Violations on FDI Attract Severe Penalties
  • Issuing shares to foreign investors below FEMA FMV, or failing to file FC-GPR within 30 days, attracts FEMA compounding penalties. Timely compliance is non-negotiable.
  • Clean Cap Table Is Investor Due Diligence-Ready
  • Investors in subsequent rounds conduct detailed cap table and compliance due diligence. Prior allotments with procedural irregularities can block or delay future funding rounds.
  • Angel Tax Exposure Requires Pre-Issuance Valuation
  • Section 56(2)(viib) taxes excess of issuance price over FMV as company income. A merchant banker valuation report supporting the issuance price is the complete statutory protection.
  • PROCESS
  • Step Name
  • What Happens
  • Timeline
  • Step 1
  • Issuance Structuring
  • We advise on the appropriate type (private placement, rights, bonus), FEMA classification for foreign investors, pricing requirements, and shareholder approval procedure.
  • Step 2
  • Board and Shareholder Approvals
  • Ordinary Resolution - and manage the EGM or postal ballot process if required.
  • Days 1–7
  • Step 3
  • Allotment and Share Certificates
  • We manage the share allotment - preparing the allotment list, share certificates, updated register of members, and Form PAS-3 for ROC.
  • Days 7–14
  • Step 4
  • Regulatory Filings
  • Form PAS-3 with ROC (within 30 days). Form FC-GPR with RBI (for FDI, within 30 days). Updated cap table delivered to the company.
  • Days 14–44

How It Works

Execution is straightforward. Hand over the details and relax.

Consultation Request

Drop your inquiry.

Data Preparation

Our agents format the forms via robust checks.

Execution

Final approvals fetched from the regulating authorities.

Expected Additional Levies

  • Filing Fees to Government
  • E-Stamp Duties according to state norms
  • Processing Levies based on capital limits

Core Advantages to Remember

Avoid Penalties

Better Market Position

Standardized Documentation

FAQ's