ISSUE OF CONVERTIBLE NOTES BY START UPS – A BIG LEAP

Chandni Ansari24 Oct, 2024Finance

In a recent move, the Reserve Bank of India (RBI) vide Notification dated 10th January, 2017 introduced a new instrument for Start up companies named as ‘Convertible Notes’ by amending the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 (Regulations) through issue of Foreign Exchange Management (Transfer of Issue of Security by a Person Resident Outside India) (Fifteenth Amendment) Regulations, 2016 (Amendment). It is an instrument issued as debt and convertible into equity of a startup at the option of the holder.