Overview
Transaction advisory covers the company-law and regulatory steps needed to complete a share issue, investment or transfer. For a private company, raising funds from new investors is typically done through a private placement under Section 42 (with an offer letter in PAS-4 and a return of allotment in PAS-3 within 15 days). Existing shareholders are usually offered shares through a rights issue under Section 62(1)(a). Foreign investment adds FEMA pricing and reporting obligations.
What Transaction Advisory Covers
- Private placement: A special resolution, the PAS-4 offer letter, a separate bank account, allotment within 60 days and PAS-3 within 15 days.
- Rights and preferential issues: Under Section 62, including the valuation requirements for preferential allotments.
- Share transfers: Transfer deeds (SH-4), stamp duty, board approval, and demat transfers.
- Convertible instruments: CCPS, CCDs and convertible notes for startups.
- Shareholder and subscription agreements: Aligning their terms with the Articles of Association.
- Increase of authorised capital: SH-7.
- FEMA reporting: FC-GPR and FC-TRS for foreign investors.
- Closing documentation: Board and shareholder resolutions, and the closing filings.
Who Needs This Service?
Startups raising angel or VC funding, companies bringing in strategic investors, promoters transferring shares, and companies issuing ESOPs or sweat equity.
Transactions in Chennai / Tamil Nadu
Stamp duty on the issue of share certificates and on physical share transfers is payable under the law of the state concerned. Since 2020, stamp duty on transfers of securities in demat form has been collected centrally through the depositories under the amended Indian Stamp Act. Tamil Nadu companies must follow the applicable state and central collection mechanism.
Benefits
Correct documentation keeps the cap table clean, avoids penalties for non-compliant private placements (which can require refund of the money with interest), and makes future due diligence easier.
Transaction Types Compared
Each transaction type brings different documents and approvals.
| Type | What happens | Key documents |
|---|---|---|
| Equity investment | An investor subscribes to shares | Term sheet, subscription and shareholders' agreement |
| Share acquisition | Existing shares are bought | Share purchase agreement |
| Joint venture | Parties combine for a project | Joint venture agreement |
| Business transfer | A business or undertaking is transferred | Business transfer agreement |
Documents Required
The term sheet, the investor KYC, the valuation report (from a registered valuer, and from a CA or merchant banker for FEMA pricing where applicable), board and shareholder resolutions, bank statements showing receipt of funds, and the agreements.
Deal Documents and Their Purpose
Each document has a distinct job.
| Document | Purpose |
|---|---|
| Term sheet | Records main commercial terms |
| Shareholders' agreement | Sets governance and exit rights |
| Share purchase agreement | Records price and warranties |
| Disclosure letter | Qualifies warranties |
How KVA Handles Transaction Advisory
Karthick Vijayakumar & Associates, Company Secretaries, supports you through each stage with a single point of contact and a clear record of what has been done.
| Step | Stage | What KVA does |
|---|---|---|
| 1 | Requirement review | We understand your entity, objective and timeline, and confirm what Transaction Advisory involves for your specific facts. |
| 2 | Document checklist | You receive a clear list of documents, particulars and approvals needed, with gaps flagged early. |
| 3 | Preparation and filing | Our team prepares, reviews and files the required forms and records, and tracks each acknowledgement. |
| 4 | Completion and follow-up | We hand over final records and explain the compliance that follows, so nothing is missed afterwards. |
Fees and Timeline
MCA fees are payable on SH-7 and PAS-3. Stamp duty is payable on the issue and transfer of shares. Professional fees are available on enquiry. A typical private placement takes 3–6 weeks from signing the term sheet to filing.
Why Karthick Vijayakumar & Associates
Work is handled by company secretaries who deal with statutory filings and governance every day.
Timelines for Transaction Advisory are tracked so that approvals and filings do not slip.
Plain-language updates at each stage, with no guesswork about what is pending.
Organised, decision-ready documentation that supports audits, banks and future filings.
Frequently Asked Questions
An offer of securities to a select group of persons, not exceeding 200 in a financial year (excluding QIBs and employees under ESOP), made through a PAS-4 offer letter under Section 42.
No. Private placement money must be received through banking channels from the subscriber’s own account.
Within 60 days of receiving the application money. Otherwise, the money must be refunded within 15 days, or interest becomes payable.
Within 15 days of allotment.
A registered valuer’s report is required for preferential allotments and private placements. A FEMA-compliant valuation is required where non-residents invest.
Yes. For physical shares it is paid at the rate on the transfer deed, and for demat transfers it is collected by the depository at the rate prescribed under the Indian Stamp Act.
Investor rights such as transfer restrictions, affirmative votes and board seats should be reflected in the Articles to be enforceable against the company.
Form FC-GPR within 30 days of allotment, or FC-TRS within 60 days of a transfer, on the RBI’s FIRMS portal.
Yes, subject to the rules on deposits and debentures. Startups have specific exemptions for convertible notes.
It is treated as a public offer, and penalties are imposed. The money may also have to be refunded.
An offer of new shares to existing shareholders in proportion to their holdings, which they can accept, renounce or reject within the stated period.
An issue of shares to a select group of persons on terms approved by a special resolution, subject to pricing, valuation and filing requirements of the Companies Act.
A contract among shareholders that sets rights such as board nomination, vetoes, transfer restrictions, tag-along, drag-along and exit terms.
By independent valuation prepared by a registered valuer, as the Companies Act and FEMA require in many cases, and agreed between the parties.
Return of allotment (PAS-3), updated registers, share certificates and, for foreign investment, reporting under FEMA, along with corresponding stamp duty.
A company purchases its own shares from members, within the limits of the Companies Act, from free reserves, share premium or other permitted sources.
Generally no, except for the limited cases such as sweat equity and shares issued under approved schemes. Shares at a discount are restricted under the Companies Act.
A non-binding document that summarises the key commercial terms of an investment or acquisition before detailed agreements are prepared.
Board approval, audit committee approval where applicable and, above the prescribed thresholds, shareholders’ approval by a resolution in which the related parties do not vote.
We assist with valuation coordination, resolutions, agreements, allotments, ROC and FEMA filings, and the updating of statutory records after closing.
Raising Funds or Transferring Shares?
Contact Karthick Vijayakumar & Associates to discuss the approvals, documents and filings your transaction requires.
Contact UsSpeak with Karthick Vijayakumar & Associates
Third Floor, New No. 599, Old No. 230, Konnur High Road, Ayanavaram, Chennai, Tamil Nadu, 600023, India
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