To provide more flexibility and support to Indian startups, the ministry of corporate affairs (MCA) has revised rules related to the acceptance of deposits by companies.
With this, the amendment now allows startups to raise funds through corporate bonds or other convertible instruments for 10 years, as against 5 years.
The ministry of corporate affairs (MCA) department has also changed the period of repayments from 5 to 10 years.
Apart from this, an amount of up to INR 25 Lakh received by a startup through a convertible note in a single tranche will not be considered ‘deposits’ under company law compliance.
When pandemic has severely impacted businesses and the economy, the amendment will offer more flexibility for startups to raise funds.
Also, the Indian government is reportedly looking to release a draft report. The report will pave the way for Indian companies to list their shares in the overseas market without listing in India first.
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