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
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.
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.
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.