Startup Services · iSAFE Notes

iSAFE Notes raise early-stage capital with a simple, India-compliant instrument.

The India Simple Agreement for Future Equity (iSAFE) is an adaptation of the popular SAFE instrument, structured to work within Indian company law by using convertible notes or CCPS as the underlying legal instrument for the eventual equity conversion.

A SAFE (Simple Agreement for Future Equity) is a US-style instrument that lets a startup raise capital without immediately fixing a valuation, converting into equity at a future priced round. Because a pure SAFE has no direct equivalent under Indian company law, Indian startups use an adapted structure — commonly called an iSAFE — that achieves the same commercial outcome using instruments recognised under the Companies Act, most often convertible notes or CCPS.

For eligible startups recognised by DPIIT, the Companies Act specifically permits the issue of convertible notes — instruments that convert into equity shares within five years, or are repayable, at the option of the holder — under Rule 2(1)(vi) of the Companies (Acceptance of Deposits) Rules, making them the natural legal wrapper for an iSAFE.

At Beyonte Compliances, we help early-stage startups structure the iSAFE using a convertible note or CCPS wrapper, draft the agreement to reflect the intended SAFE mechanics (valuation cap, discount, most-favoured-nation clause), and complete the ROC and, where applicable, FEMA filings.

What Our iSAFE Notes Service Covers

Instrument Structuring

Structuring the iSAFE as a convertible note or CCPS wrapper that achieves the intended SAFE-style economics under Indian law.

DPIIT Eligibility Check

Confirming the company's eligibility to issue convertible notes as a recognised startup under the Companies Act rules.

Agreement Drafting

Drafting the iSAFE agreement incorporating valuation cap, discount rate, and conversion mechanics agreed with the investor.

Board & Shareholder Approval

Preparing resolutions for board approval and shareholder approval for issue of the convertible note or CCPS.

Private Placement Compliance

Managing the Section 42 private placement process for the instrument, including Form PAS-4 where applicable.

FEMA Compliance

Ensuring the instrument and its pricing comply with FEMA requirements where the investor is a foreign entity.

ROC Filings

Filing Form PAS-3 on allotment, and other filings triggered by issue of the convertible note or CCPS.

Conversion at Priced Round

Managing conversion of the instrument into equity shares at the subsequent priced round, per the agreed mechanics.

Our Process

Structuring

Selecting the appropriate legal wrapper — convertible note or CCPS — for the intended iSAFE terms.

Drafting the Agreement

Preparing the iSAFE agreement with the agreed valuation cap, discount, and conversion mechanics.

Approvals

Obtaining board and shareholder approval for issue of the underlying instrument.

Allotment

Allotting the convertible note or CCPS to the investor and completing the private placement process.

Conversion

Converting the instrument into equity shares at the next priced round in line with the agreed terms.

Why It Matters

✓Enables fast, low-friction early-stage fundraising without fixing valuation upfront

✓Structured to work within Indian company law, unlike a plain US-style SAFE

✓Preserves founder-friendly terms familiar to global investors

✓DPIIT-recognised startups benefit from the convertible note route under the rules

✓Full Section 42 and FEMA compliance reduces regulatory risk

✓Clear conversion mechanics avoid disputes at the priced round

✓Correct ROC filings on issuance keep the company's compliance record clean

✓End-to-end support from structuring through to eventual conversion

Frequently Asked Questions

A plain US-style SAFE is not a recognised instrument under the Companies Act, so it cannot be issued in its original form by an Indian company. The iSAFE structure achieves the same commercial intent using a convertible note or CCPS as the legal wrapper.

Only startups recognised by DPIIT under the Startup India framework can issue convertible notes under Rule 2(1)(vi) of the Companies (Acceptance of Deposits) Rules, and each investor must invest a minimum amount as prescribed.

Convertible notes typically include a redemption obligation if conversion does not occur within the agreed period, whereas CCPS must compulsorily convert — so the outcome depends on which instrument is used as the wrapper for the iSAFE.

Yes, but the instrument and its pricing must comply with FEMA regulations and RBI reporting requirements applicable to convertible notes or CCPS issued to non-resident investors.

Raise your seed round with an India-compliant iSAFE.

Talk to our team about structuring and issuing iSAFE notes for your startup.