{"id":6845,"date":"2018-01-31T13:00:41","date_gmt":"2018-01-31T07:30:41","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=6845"},"modified":"2020-12-21T11:30:56","modified_gmt":"2020-12-21T06:00:56","slug":"procedure-registration-venture-capital-funds","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/procedure-registration-venture-capital-funds\/","title":{"rendered":"Procedure for Registration of Venture Capital Funds"},"content":{"rendered":"<p>NGO Registration of Venture Capital is regulated by SEBI (Venture Capital Funds) Regulations, 1996. Any Company or trust proposing to carry on an activity as a Venture Capitalist shall make an application to SEBI for grant of Certificate.<\/p>\n<h2>What are They?<\/h2>\n<p>Venture capital&nbsp;funds are&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/i\/investment-fund.asp\">investment funds<\/a>&nbsp;that manage the money of investors who seek&nbsp;private equity&nbsp;stakes in&nbsp;startup&nbsp;and small- to medium-sized enterprises with strong growth potential. These investments are generally characterized as high-risk\/high-return opportunities. Venture capital funds are private equity&nbsp;investment vehicles&nbsp;that seek to invest in firms that have high-risk\/high-return profiles, based on a company&rsquo;s size, assets and various stages of economic development.<\/p>\n<p>They are an early age investment with a long-term horizon. Many of these funds make small bets on a wide variety of young startups, believing that at least one will achieve high growth and reward the fund with a comparatively large&nbsp;payout&nbsp;at the end.<\/p>\n<p>Examples: Nexus Venture Partners, Fidelity Growth Partners, Hellion Venture Partners etc<\/p>\n<h4>How to Apply?<\/h4>\n<p>An Application for grant of Certificate of Registration shall be made to Board in Form A which shall be accompanied by NON-REFUNDABLE FEE.<\/p>\n<p>Board may in the interest of investors issue directions for transfer of records, documents or securities of disposal of investments relating to VC&rsquo;s activities.<\/p>\n<p>On receipt of the intimation, the applicant shall pay to the Board, Registration Fees as specified &amp; thereafter the Board on receipt of Fees shall grant a Certificate of Registration in Form B.<\/p>\n<h2><strong>Eligibility Criteria:<\/strong><\/h2>\n<ul>\n<li>If it&rsquo;s a COMPANY:<\/li>\n<\/ul>\n<p>MOA should reflect the activity of Venture Capital Fund.<\/p>\n<p>Prohibited by its MOA &amp; AOA from making an invitation to the public to subscribe to its securities.<\/p>\n<p>Directors &amp; Officers are not involved in any litigation connected with Securities <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Market&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;A market is a structured environment, either physical or virtual, where buyers and sellers convene to trade goods and services. This trading hub operates based on the principles of supply and(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/market\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>Market<\/a>.<\/p>\n<p>Should be a Fit &amp; Proper person.<\/p>\n<ul>\n<li>If it&rsquo;s a TRUST:<\/li>\n<\/ul>\n<p>The main object of the Trust is to carry on the activity as VC Fund.<\/p>\n<p>The instrument of the <a href=\"https:\/\/enterslice.com\/ngo-registration\">NGO registration<\/a> is in the form of Deed &amp; has been duly registered under <strong>Indian Registration Act, 1908.<\/strong><\/p>\n<p>Directors are not involved in any litigation connected with Securities Market or been convicted of any offense involving moral turpitude.<\/p>\n<p>Should be a fit &amp; proper person.<\/p>\n<ul>\n<li>If it&rsquo;s a BODY CORPORATE:<\/li>\n<\/ul>\n<p>Set up under the laws of Central or State Legislature.<\/p>\n<p>The applicant is permitted to carry on such activities.<\/p>\n<p>The applicant is a fit &amp; proper person.<\/p>\n<p>Directors of the Trust are not involved in any litigation connected with Securities Market or been convicted of any offense involving moral turpitude.<\/p>\n<p>Applicant has not been refused a Certificate by Board earlier.<\/p>\n<h2><strong>Minimum Investment Criteria: <\/strong><\/h2>\n<ul>\n<li>A VC can raise funds from any investor whether Indian, Foreign or Non-Resident Indian.<\/li>\n<li>No VC Fund either company or trust shall accept any investment from any investor which is less than 5 lakhs rupees.<\/li>\n<li>The scheme launched shall have a commitment from the investors for the contribution of an amount of at least 5 Cr.<\/li>\n<\/ul>\n<h2><strong>Investment Conditions:<\/strong><\/h2>\n<ul>\n<li>It shall disclose the investment strategy at the time of putting forth application.<\/li>\n<li>It shall not invest more than 25% corpus of the fund in one VC undertaking.<\/li>\n<li>It may invest in securities issued by Foreign Companies subject to <a href=\"https:\/\/www.rbi.org.in\/\">RBI<\/a> norms specified in this behalf.<\/li>\n<li>Shall not invest in associated companies.<\/li>\n<li>It shall disclose the duration of Life Cycle of the fund.<\/li>\n<li>No VCF shall be entitled to get its units listed till the expiry of 3 years from the date of issuance of units by VCF.<\/li>\n<li>It shall make investment in the following manner &ndash;<\/li>\n<li>At least 66.67% of investible funds shall be invested in unlisted Equity Shares.<\/li>\n<li>Not more than 33.33% of the investible funds may be invested by way of either of the following i.e. Subscription to IPO of a VC whose shares are proposed to be listed, Debt or Debt instruments of a VCF, preferential <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Allotment&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;An allotment is the systematic distribution of business resources, often pertaining to the distribution of shares during initial public offerings (IPOs) to underwriting firms or to new and(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/allotment\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>allotment<\/a> of equity shares of listed company provided they have a lock-in period of 1 year, Equity shares of a financially weak or sick company who are listed or SPV created by VCF for the purpose of promoting investment.<\/li>\n<\/ul>\n<p><strong>*<\/strong>No VCF shall issue any documents inviting the public for subscription of its units. It may, however, receive monies through Private Placement of its units.<\/p>\n<p>Documents to be filed with SEBI:<\/p>\n<ul>\n<li>Information Memorandum<\/li>\n<li>Copy of Placement Memorandum<\/li>\n<li>Copy of Contribution or subscription agreement<\/li>\n<li>Report of money actually collected from investors.<\/li>\n<\/ul>\n<p>Board before ordering an inspection, shall not give less than 10 days&rsquo; notice to VCF. During the course of the inspection, the VC shall be bound to discharge its obligations.<\/p>\n<p>The inspecting officer shall soon upon completing inspection submit an investigation or inspection report to the Board.<\/p>\n<h2><strong>FEES:<\/strong><\/h2>\n<ul>\n<li>Application Fee: 1,00,000\/-<\/li>\n<li>Registration Fee: 10,00,000\/-<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>NGO Registration of Venture Capital is regulated by SEBI (Venture Capital Funds) Regulations, 1996. Any Company or trust proposing to carry on an activity as a Venture Capitalist shall make an application to SEBI for grant of Certificate. What are They? Venture capital&nbsp;funds are&nbsp;investment funds&nbsp;that manage the money of investors who seek&nbsp;private equity&nbsp;stakes in&nbsp;startup&nbsp;and small- [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":6850,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[129],"tags":[1575,84,416,504],"acf":{"service_id":"10"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Procedure for Registration of Venture Capital Funds Online<\/title>\n<meta name=\"description\" content=\"Any Company or trust proposing to carry on an activity as a Venture Capitalist shall make an application to SEBI for grant of Certificate.\" \/>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterslice.com\/learning\/procedure-registration-venture-capital-funds\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Procedure for Registration of Venture Capital Funds Online\" \/>\n<meta property=\"og:description\" content=\"Any Company or trust proposing to carry on an activity as a Venture Capitalist shall make an application to SEBI for grant of Certificate.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterslice.com\/learning\/procedure-registration-venture-capital-funds\/\" \/>\n<meta property=\"og:site_name\" content=\"Enterslice\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/enterslice\" \/>\n<meta property=\"article:author\" content=\"enterslice\" \/>\n<meta property=\"article:published_time\" content=\"2018-01-31T07:30:41+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-12-21T06:00:56+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2018\/01\/Venture-Capital.jpeg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"853\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@enterslice\" \/>\n<meta name=\"twitter:site\" content=\"@enterslice\" \/>\n<!-- \/ Yoast SEO plugin. -->","authorName":"Narendra Kumar","authorImageUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/04\/nk-1.jpg","authorDescription":"Experienced Finance and Legal Professional with 12+ Years of Experience in Legal, Finance, Fintech, Blockchain, and Revenue Management.","postViews":783,"readingTime":3,"nextPost":{"id":6852,"slug":"one-person-company-vs-limited-liability-partnership"},"prevPost":{"id":6846,"slug":"registration-of-foreign-company-in-india"},"featuredMediaUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2018\/01\/Venture-Capital.jpeg","postTerms":"NGO","_links":{"self":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/6845"}],"collection":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/comments?post=6845"}],"version-history":[{"count":0,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/6845\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media\/6850"}],"wp:attachment":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media?parent=6845"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/categories?post=6845"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/tags?post=6845"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}