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Startup Services · CCPS Issuance

Issuance of CCPS raise capital through compulsorily convertible preference shares.

Compulsorily Convertible Preference Shares are the preferred instrument for most Indian venture capital rounds — combining downside protection for investors with a defined conversion into equity, while remaining compliant with the Companies Act and FEMA pricing norms for foreign investment.

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CCPS are preference shares that must convert into equity shares of the company at a pre-agreed ratio, either on a specified date or on the occurrence of a specified event, such as a subsequent funding round or IPO. Because they carry preferential rights on dividend and liquidation while ultimately converting to equity, CCPS are the standard instrument for venture capital and private equity investment into Indian companies.

Issuing CCPS requires authorisation under the company's articles of association, a special resolution of shareholders, and — where the investor is a foreign entity — compliance with FEMA pricing guidelines, which require the issue price to be supported by a valuation report from a Category I merchant banker or a chartered accountant, as applicable.

At Beyonte Compliances, we assist companies with structuring the terms of the CCPS, amending the articles to include the class of shares, obtaining shareholder approval, and completing the allotment and regulatory filings, including FC-GPR for foreign investment.

What Our CCPS Issuance Service Covers

Instrument Structuring

Structuring the CCPS terms — coupon, conversion ratio, conversion triggers, and liquidation preference — as negotiated with investors.

Articles Amendment

Drafting and filing the amendment to the articles of association to authorise the class and terms of the CCPS.

Valuation Compliance

Coordinating the valuation report required under FEMA pricing guidelines where the CCPS is issued to a foreign investor.

Board & Shareholder Approvals

Preparing resolutions for board approval and the special resolution required for issue of a new class of shares.

Private Placement Process

Managing the Section 42 private placement compliance, including the offer letter in Form PAS-4.

Allotment & PAS-3 Filing

Filing Form PAS-3 with the Registrar of Companies within 30 days of allotment of the CCPS.

FC-GPR Filing

Filing Form FC-GPR with the RBI through the AD bank for CCPS allotted to a foreign investor, within the prescribed timeline.

Conversion Compliance

Managing the conversion of CCPS into equity shares on the trigger event, including the resulting ROC filings and register updates.

Our Process

1

Term Structuring

Finalising the CCPS terms — price, coupon, conversion ratio and trigger — in line with the term sheet.

2

Articles Amendment

Amending the articles of association to authorise the new class of preference shares.

3

Valuation & Pricing

Obtaining the valuation report required to support the issue price, particularly for foreign investment.

4

Shareholder Approval & Allotment

Passing the special resolution and allotting the CCPS to investors.

5

Regulatory Filings

Filing PAS-3 with the ROC and FC-GPR with the RBI, as applicable, to complete the transaction.

Why It Matters

✓Investor-preferred instrument that eases negotiation of funding rounds
✓Downside protection for investors without permanently diluting founders
✓Full FEMA pricing compliance for foreign direct investment via CCPS
✓Correct articles amendment makes the share class enforceable
✓Timely FC-GPR filing avoids RBI compounding proceedings for delay
✓Clear conversion mechanics avoid disputes at the time of conversion
✓Clean documentation that supports diligence in future rounds
✓End-to-end support from structuring through to eventual conversion

Frequently Asked Questions

CCPS give investors preferential rights on dividend and liquidation ahead of equity shareholders, while still guaranteeing eventual conversion into equity — offering downside protection without giving up upside participation.
A valuation report is mandatory where the CCPS are issued to a foreign investor, under FEMA pricing guidelines, to ensure the issue price is not less than the fair value. For resident investors it is generally advisable though not always statutorily mandated.
FC-GPR is the form used to report allotment of shares (including CCPS) to a foreign investor under FDI. It must be filed with the RBI through an Authorised Dealer bank within 30 days of allotment.
CCPS generally carry limited voting rights compared to equity shares, restricted mainly to matters directly affecting their rights, until they convert into equity shares, at which point they carry full equity voting rights.

Structure and issue CCPS for your next funding round.

Talk to our team about terms, valuation, and regulatory compliance for your CCPS issuance.

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