Fund Raising Under Companies Act, 2013

Introduction

Fund raising by companies has picked up pace in the last few years on account of rise in start-up culture and entrepreneurship in India. While starting - up one's enterprise faces numerous challenges, the primary hurdle faced by every start-up company is capital raising.

Companies incorporated under the Companies Act, 2013 ("Act") have the option of issuing various instruments to its investors and meet their capital requirements from time to time. The technical term for instruments issued by companies to investors is 'securities'. While the issue of securities represent an investor's interest in the company, they are primarily a bundle of rights and obligations accruing to the investor either at the time of its issue or on the occurrence of specific events or winding up of the company. Once the securities are issued to investors they may or may not alter the capital table of the company. The capital table is a structure depicting the total capital