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Private equity services

Private Placement Services: Unlock Customised Investment Solutions

At LawCrust Legal Consulting, we offer specialized legal services for businesses looking to raise capital through private placements. Our team ensures that your investment journey is smooth, compliant, and aligned with your long-term growth goals. Whether you’re seeking investors for your start-up or expanding an established venture, we guide you through every step of the private placement process.

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Why Choose Private Placement?

Private placement is a strategic method of raising funds by issuing securities to a select group of investors rather than the public. Governed by Section 42 of the Companies Act, 2013, this approach offers flexibility, efficiency, and a tailored investment solution for companies of all sizes.

At LawCrust, we specialize in making private placements seamless and effective, providing end-to-end solutions for businesses seeking growth capital without the constraints of traditional fundraising methods.

Our Expertise: Comprehensive Solutions

Management Consulting Meets Legal Expertise
LawCrust is a globally managed professional consulting company that combines expertise in Management, Finance, Technology, and Legal Solutions. We empower businesses to secure private funds through private placement methods on a global scale.

Securities We Handle:

  • Equity Shares (Common/Preference Shares)
  • Convertible/Non-Convertible Debentures
  • Zero-Interest Bonds/Unsecured Bonds

Our Private Placement Legal Services

At LawCrust, we assist businesses through every stage of the private placement process, offering comprehensive legal services, including:

PPM Drafting and Review

Our legal experts draft, edit, and review your Private Placement Memorandum, ensuring that it meets local and global regulatory standards.

Investor Documentation

We help you prepare all necessary documents, such as subscription agreements and shareholder agreements, ensuring compliance and clarity for all parties involved.

Risk & Compliance Advisory

Our team offers strategic advice on navigating the complexities of securities laws, ensuring your private placement aligns with both local and international regulations.

Due Diligence Support

We assist in gathering and presenting the necessary financial and business information to investors, enhancing credibility and fostering trust.

Our Process: Building Success Together

  • Step 1: Understanding Your Goals We begin by gaining a deep understanding of your business, its objectives, and its financial needs.
  • Step 2: Customised Investor Offers Our team crafts personalized proposals to attract the right investors aligned with your vision and industry.
  • Step 3: Seamless Execution We manage the entire private placement transaction, ensuring compliance and a smooth process.
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Challenges We Solve

  • No Collaterals Required

    Unlike traditional loans, private placements eliminate the need for collateral, providing businesses with an opportunity to raise funds without risking their assets.

  • No Business Vintage or Credit History Needed

    1. No CIBIL or CRISIL scores required.
    2. No need for a 3-year IT record or established business history.

  • Hassle-Free Fundraising

    We help you overcome barriers to scaling your business, focusing on your potential rather than your past.

Why Private Placement?

  • 1. Flexibility to Grow at Your Own Pace Raise funds as needed within a fiscal year, allowing your business to scale sustainably.
  • 2. Limited Regulatory Hurdles Private placements don’t require SEBI permissions for offerings to less than 200 investors, simplifying the process.
  • 3. Customisable Returns You decide the returns, ensuring terms that benefit both your company and your investors.

Frequently Asked Questions

A private placement is a method of raising capital by offering securities (like shares, debentures, or bonds) to a select group of investors instead of making a public offering. It is governed by Section 42 of the Companies Act, 2013, and allows companies to raise funds efficiently while maintaining confidentiality.

Private placement offers several advantages, including:

  • Speed: Faster execution compared to public offerings due to fewer regulatory hurdles.
  • Flexibility: Companies can structure the deal and pricing as per their needs.
  • Targeted Investor Base: Enables the company to approach investors with a clear understanding of their business.
  • Reduced Regulatory Burden: Requires fewer disclosures and compliance compared to public offerings.

Private placements in India are generally open to the following:

  • Qualified Institutional Buyers (QIBs)
  • High Net-Worth Individuals (HNIs)
  • Employees under Employee Stock Option Plans (ESOPs)
  • Other identified individuals or entities approved by the company’s board
    As per the Companies Act, the total number of investors cannot exceed 50 per offer or 200 in a financial year, excluding QIBs and ESOP participants.

The process is governed by the Companies Act, 2013, and SEBI (Securities and Exchange Board of India) regulations. Key requirements include:

  • Board Resolution: Approval from the board of directors and shareholders.
  • Offer Letter: Issued in Form PAS-4 to identified investors.
  • Filing with Registrar of Companies (ROC): Details of the offer must be filed within 30 days in Form PAS-5.
  • Cap on Investors: A maximum of 200 investors in a financial year.

A PPM is a legal document that outlines the terms of the private placement. It includes:

  • Business overview and market potential
  • Types of securities offered (shares, debentures, etc.)
  • Risk factors and financial details
  • Details of the subscription agreement
    The PPM serves as a critical document for attracting investors and ensuring regulatory compliance.

The process involves several steps:

  1. Board Approval: Obtain approval through a board resolution.
  2. Shareholder Resolution: Pass a special resolution at the general meeting.
  3. Preparation of Offer Letter (Form PAS-4): Send the offer letter to identified investors.
  4. Application Form Distribution: Provide serially numbered application forms to potential investors.
  5. ROC Filings: File PAS-4 and PAS-5 with the Registrar of Companies within the specified timeline.
  6. Allotment of Securities: Allot securities within 60 days of receiving application money.
  • Confidentiality: Maintains privacy compared to public offerings.
  • Targeted Approach: Allows companies to engage with specific investors.
  • Cost-Effective: Involves lower regulatory and marketing costs.
  • Quick Access to Capital: Facilitates faster fund-raising for urgent needs.
  • Liquidity Risk: Securities issued through private placement are not readily tradable.
  • Valuation Risk: Incorrect valuation of securities may impact investment returns.
  • Regulatory Risk: Non-compliance with laws may result in penalties.
  • Business Risk: The investment’s success depends on the company’s performance.
  • For Investors: Capital gains tax applies on the sale of securities, with rates varying based on the holding period.
  • For Issuers: Applicable taxes may include stamp duty on the issuance of securities and other transaction-related taxes.

At LawCrust, we offer end-to-end support for private placements, including:

  • Drafting and reviewing PPMs and legal documents.
  • Ensuring compliance with Indian regulations.
  • Filing required forms with the ROC and other authorities.
  • Facilitating investor communication and subscription processes.
  • Providing expert advice on structuring and executing successful private placements.
Our Credentials

About Us

LawCrust  – Your Amicus at Work

LawCrust is Leading Legal Consulting and Research Firm involved in introducing Innovative and path breaking Products and Services for Consumers and Corporate Clients. Our services helps fostering  Professionals, Businesses & Individuals to explore new paradigms of Legal Problems through its extensive research in Industries and study their Legal Implications. Our Motivation is to build a sustainable eco-system, where we accommodate everyone & foster clients, businesses, and professionals. This makes us possible to do, with the help of a better understanding of modern-day legal challenges and solving problems with the power of Harnessing Data, Technology and Artificial Intelligence

# Consultation available with prior appointments only

# We appreciate to meet with Prior appointment only