Venture Capital Company Registration

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Venture Capital Company Registration

Venture Capital is a company which helps in providing support to the company by way of funds to small, emerging, early stage, start up companies. Venture capitalist invests in the areas
Where there is high growth potential in terms of profits. In exchange for equity these investments are made in growing companies or in the startups where venture capitalists have ownership stakes. These companies takes risk in terms of finance in order to take output of the startup company in future. Startups are evaluated by the venture capitalists on the basis of innovative technology, business model, strategies and urge of being successful. These companies focused on the specific sectors which are running successfully or which have acquired the market. The equity stakes in the business depends upon the Profitability of the company, that is why while selecting companies venture capitalists are very selective in choosing company of this type. Ventures are interested in companies which have high growth potential as such opportunities are capable of providing financial returns and also exit after the specified time frame.


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What is the procedure for Venture Capital Registration?
The process to be followed are as follows-

1. Firstly incorporation of the company is required according to the Companies Act, 2013 with the objective to act as Venture Capitalist i.e. the activity which is to be carried on the business of Venture Capital Funds. Its memorandum shall prohibit the invitation to the public to subscribe to its securities. The Director of the company should not be convicted of any offence ever and also should not be involved in litigations connected to securities market and should be fit and proper person.
2. For the grant of Registration, SEBI ( Venture Capital Funds) Regulations, 1996 needs to be complied with. Form A needs to be filed along with the necessary documents and prescribed fees of Rs. 1,00,000/-. In that copy of Memorandum of Association And Articles of Association needs to be submitted along with Investment management Agreement (if any).
3. Along with the application form and other documents, details relating to the investment manager, investment advisor, AMC activities, precise description and profile of the Directors, shareholding pattern, key personnel/management team and any other such details as required needs to be given.
4. A statement relating to whether a company is registered as per SEBI or in any capacity needs to be disclosed.
5. A proper disclosure of investment strategy needs to be done, specifying the investment style/ pattern, proposed corpus, class of investors, and life cycle of funds and other relevant information.
6. Some particular declaration such as undertaking under regulation 11(3) of SEBI ( Venture Capital Funds) Regulation Act, 1996, undertaking under third schedule to SEBI (Venture Capital Funds) Regulations, 1996 and declaration in respect of “fit and proper person” neds to0 be furnished.
7. On receipt of application the board evaluates the documents and after being satisfied intimates the applicant.
8. The applicant after getting intimation will pay the prescribed fees.
9. Grant of certificate is received in the form of Form B.
Advantages of Venture capital
High Profitability
The new and innovative projects which are financed by venture capitalists aims at earning of higher profits in longer run. The main motive of investment is to earn higher profits by taking higher risks, more the risk more the profits is the key strategy of the venture capitalists.

Business expertise
Venture capitalists gives support to the startup companies in the growth of their businesses. This can help in exploring and efficient implementation of business decisions, and making financial management, and human resource management functions more expediently. Making better decisions is the key areas help vitally for the growth of the business.

Additional resources
Many a times raes like legal, tax, and personnel matters, a venture capital is helpful in providing Support and most important support at the growth stage of the company is provided. The young company thus strives for faster growth and greater success.

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