The vocabulary of Indian
corporate governance.

Investor right that adjusts conversion price when a company issues shares at a lower price in a later round. Indian VCs typically take broad-based weighted-average.

Maximum share capital a company can issue per its MoA. Distinct from paid-up. Increased via Form SH-7 after a Section 61 special resolution.

Company repurchases its own shares from existing holders under Section 68. Subject to 25% capital limit, debt-equity test, and Section 115QA tax at 23.296%.

Ledger of every security issued by a company — equity, preference, options, warrants, convertibles — and the ownership percentages they represent.

Hybrid debt instruments that must convert to equity by a fixed date. Treated as equity under FEMA; popular for FDI-route investments into Indian startups.

Period an ESOP grantee must serve before any options begin to vest. The Indian-startup market norm is a 1-year cliff with monthly vesting thereafter.

Investor right to force minority shareholders to join a sale on the same terms. Standard in Indian VC SHAs; usually triggered above a threshold consideration.

Reserved share capacity for future ESOP grants. Typically sized at 10–15% post-money. Pre-money expansion is a hidden founder-dilution cost.

Foreign-currency-denominated convertible bonds issued by Indian companies. Governed by RBI's ECB framework and the FCCB Scheme 1993.

Investor right to receive proceeds before equity holders on a liquidation event. Indian VC standard is 1x non-participating.

Cash-settled synthetic equity — no real shares, no dilution, no ROC filing. Taxed fully as salary income at payout, with no capital-gains component at all.

Pre-money = company value before new investment. Post-money = pre-money + new money raised. Drives the investor's ownership percentage.

Right to match a third-party offer before the seller can transfer shares. Standard pre-emption clause in Indian SHAs alongside ROFO and tag-along.

A promise of actual shares on vesting, with no exercise price — unlike an ESOP, which is an option. Indian company law is written around options, so RSUs mostly show up via a foreign parent.

US-origin convertible instrument used in Indian early-stage rounds. Tax and FEMA treatment uncertain; CCDs / CCPS often preferred for clean compliance.

Category of shares with distinct rights — equity vs preference; voting vs non-voting; ordinary vs Class A/B/DVR. Governed by Section 43 and the AoA.

Shares issued for non-cash value — know-how, IP, or contribution — under Section 54. Unlike an ESOP, sweat equity can go directly to promoters and directors, and is issued as shares, not options.

SEBI's three-tier classification of pooled investment vehicles in India. Determines tax pass-through, leverage limits, and permitted investments.

Formal notice from a fund's GP to its LPs to fund a portion of their committed capital. Indian AIFs typically issue drawdowns 10–15 business days in advance.

GP's performance share of fund profits, typically 20% above an 8% preferred return hurdle. Recent SEBI rules tighten attribution and disclosure.

Realized cash returned to LPs divided by capital contributed. A DPI of 1.0 means LPs have got their money back; >1.0 means realized profit.

Statements AIFs must produce under Section 115UB for pass-through income. Form 64C goes to each unit-holder; Form 64D is the fund's own filing to the tax department.

The fund manager — sponsors, raises, deploys, and exits the fund. In Indian AIFs, structured as Investment Manager + Sponsor + Trustee triangle.

Fund investor providing capital. In Indian AIFs, structurally a 'Contributor' under the Indian Trusts Act framework — ₹1 crore minimum commitment.

The periodic statement a fund sends each LP — opening balance, drawdowns, distributions, NAV movement, closing balance. Effectively a bank statement for the LP's stake in the fund.

Total value (realized + unrealized) divided by total invested capital. Time-blind cousin of IRR — a 3x MOIC over 4 years is very different from over 12.

ROC filing to notify auditor appointment under Section 139. Due within 15 days of the AGM that approves the appointment.

21-character unique ID assigned by MCA to every company at incorporation. Encodes listing status, industry, state, year, and ownership type.

8-digit unique number issued by MCA to every individual proposing to be a director. Mandatory before appointment; PAN-linked; lifelong.

Annual KYC filing by every DIN holder. Due September 30. Late filing deactivates DIN and attracts a ₹5,000 reactivation fee.

Annual return of deposits and amounts not considered as deposits. Due June 30 for the year ended March 31. Often missed by startups with founder loans.

ROC filing for resolutions and agreements under Section 117. Required for special resolutions and specified Section 179(3) board resolutions. Due within 30 days.

Return of allotment of shares (equity, preference, CCDs, sweat equity) filed with ROC under Section 39(4). Due within 15 days of allotment.

Half-yearly reconciliation of share capital for unlisted public companies in demat. Filed with ROC; certified by a CA or practicing CS.

State / region-wise office of MCA responsible for incorporation, statutory filings, inspection, and enforcement under the Companies Act 2013.

The instrument used to transfer shares in a private company under Section 56. Not filed with the ROC directly — easy to confuse with SH-7, which is.

Filed with ROC for any change in authorized capital, share consolidation, sub-division, or conversion of shares. Due within 30 days of resolution.

Minimum directors required to validly conduct a board meeting under Section 174 — one-third of total strength or two directors, whichever is higher.

Board resolution passed without a meeting, by circulation under Section 175. Permitted only for matters not restricted by Rule 8 of the Board Meetings Rules.

Any general meeting of shareholders other than the AGM. Called for time-sensitive special business between AGMs — capital raises, AoA changes, name changes.

Statutory record of proceedings of board, committee, and general meetings under Section 118. Must be prepared and signed within 30 days; binding evidence in court.

ICSI's mandatory standard governing AGMs and EGMs — notice, quorum, voting, poll, and minutes. Mandatory under Section 118(10).

Mandatory registers every Indian company must maintain under Section 88 and related sections — Members, Directors, Charges, Contracts, etc.

Primary statute governing Indian companies. Successor to the Companies Act 1956. Distinguishes private, public, OPC, Section 8, with chapter-wise compliance.

SEBI's ESG disclosure framework. Mandatory for the top 1,000 listed companies by market cap; voluntary for unlisted. BRSR Core is third-party assured for top 150.

Cross-border equity investment in Indian companies. Two routes: automatic (no approval) and government (prior approval). Sector caps apply.

Indian statute governing cross-border transactions. Administered by RBI. Two pillars: current account (free unless restricted) and capital account (regulated).

Investment by Indian residents in foreign entities — automatic or approval route. Governed by FEMA (Overseas Investment) Rules 2022.

Anti-money-laundering statute. Drives KYC and reporting obligations for banks, AIFs, NBFCs, and now most VDA platforms and large startups.

India's rough equivalent of a US 409A valuation — the prescribed method for the fair market value of unquoted shares, central to angel tax and ESOP perquisite valuation.

Distinct legal entity under Indian tax and personal law. Has its own PAN, files its own ITR. Frequently appears on Indian cap tables as a separate shareholder.

NPCI's bulk payment system for recurring debits and credits. Backbone of subscription, SIP, EMI, and capital-call auto-debit flows in India.

10-character ID for entities deducting/collecting tax at source. Mandatory for filing TDS returns. Distinct from PAN.

Tax withheld at the time of making specified payments. Deductor remits to government and issues a TDS certificate. Governed by Chapter XVII-B of the IT Act.