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Cap Table & Share Management
Showing 8 of 25 articles
Understanding Authorized vs. Paid-Up Capital on Your Cap Table
Authorized Capital is the maximum share capital your company is legally allowed to issue, while Paid-Up Capital is the actual money shareholders have paid in exchange for shares. Confusing the two is one of the most expensive early-stage mistakes Indian founders make — it can stall a funding round by 3–4 weeks and trigger penalties under the Companies Act, 2013.
CCPS Explained — Why Indian Investors Don't Take Equity Shares
Almost every institutional investor in India invests through Compulsorily Convertible Preference Shares (CCPS) rather than equity shares — for tax, downside protection, and FEMA reasons. This article explains how CCPS work under the Companies Act, 2013, why your cap table must distinguish Current vs. Fully Diluted ownership, and how Founding Legals automates the conversion math.
Maintaining Your Statutory Register of Members (Form MGT-1)
Under Section 88 of the Companies Act, 2013, every Indian company must maintain a Register of Members in Form MGT-1. This is not optional — failure to maintain it attracts a penalty of ₹3 Lakh on the company plus ₹50,000 per officer in default. This article shows how Founding Legals auto-generates MGT-1 every time you update your cap table.
Creating an ESOP Pool — Vesting Schedules, Form MGT-14, and Tax Triggers
An Employee Stock Option Plan (ESOP) is the most powerful retention tool for early-stage Indian startups — but it's also one of the most over-engineered. This article explains how to set up an ESOP pool under the Companies Act, 2013, structure vesting, file Form MGT-14, and understand the double-taxation event under the Income Tax Act.
Share Transfer via Form SH-4 — Selling Founder/Investor Shares
Transferring shares in an Indian private limited company isn't as simple as signing a document — it requires Form SH-4, stamp duty under the Indian Stamp Act, 1899, board approval, and updates to your Register of Members. This article walks through the complete process.
FDI Compliance & FC-GPR Filing — When Foreign Investors Wire Money
The moment a foreign investor wires money to your Indian startup, you trigger Foreign Exchange Management Act (FEMA), 1999 compliance — including filing Form FC-GPR with the Reserve Bank of India within 30 days of share allotment. Miss this, and you face compounding fees, penalties up to 3× the contravention amount, and difficulty receiving future FDI. This article walks through the complete FDI flow.
Director Appointments — DIR-3 KYC, DIN, and Form DIR-12
Adding or removing a director on your Indian private limited company is a strictly regulated process under the Companies Act, 2013. It involves DIN (Director Identification Number), DSC (Digital Signature Certificate), DIR-3 KYC, Form DIR-12, and Board/Shareholder resolutions. This article covers the full lifecycle.
Annual ROC Filings — AOC-4, MGT-7 & DPT-3 Deadlines
Every Indian private limited company — even one with zero revenue — must file annual returns with the Registrar of Companies (ROC). The three flagship filings are Form AOC-4 (financial statements), Form MGT-7/7A (annual return), and Form DPT-3 (return of deposits). Missing these is the single most common cause of startup director disqualification under Section 164.