Financing & Investment

Convertible Note

A debt-like early-stage financing instrument, structured to stay within the deposit-exemption rules β€” not just at signing, but continuously.

  • DPIIT deposit-exemption framing under the Companies (Acceptance of Deposits) Rules
  • FEMA tenure terms aligned to the current 10-year limit for foreign investors
  • Valuation cap and conversion trigger mechanics clearly defined
  • Continuing-condition language, not just a point-in-time compliance check
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βœ“ Main agreement (PDF)
βœ“ Conversion mechanics schedule
βœ“ Verification Passport (below)
Who this is for

Startups raising a bridge round

Raising capital quickly without pricing a full equity round, using a convertible instrument instead.

Early-stage investors

Investing via a convertible instrument ahead of a priced round, needing clear conversion and valuation-cap terms.

Verification passport

What we actually checked, and when.

Live verification record CONVERTIBLE NOTE
Researched and verified by Rakesh Jaiswar, LLB student, Mumbai
Deposit exemption, minimum amount and tenure
Companies (Acceptance of Deposits) Rules, 2014, Rule 2(1)(c)(xvii) Β· checked 30 Aug 2026
βœ“ VERIFIED
Foreign investor tenure limit (10 years)
FEMA (Non-Debt Instruments) (Amendment) Rules, 2022, S.O. 1802(E)
βœ“ VERIFIED
DPIIT Startup recognition, continuing condition
DPIIT Startup framework β€” status must be maintained, not just held at issuance
βœ“ VERIFIED
The deposit exemption depends on three conditions holding simultaneously throughout the instrument's life β€” minimum amount, continuing DPIIT recognition, and tenure cap β€” not just at the moment of issuance. This template flags that as an ongoing obligation, not a one-time check.
Before you sign this document:
1. Update the jurisdiction. This template is drafted with placeholder city/state fields β€” replace them with your own business's actual location, not any example city shown in the document.
2. Print on valid stamp paper. This PDF is a drafting template, not an executable legal document on its own. Under the Indian Stamp Act, most agreements need to be printed on physical stamp paper (or e-stamped) of the correct value for your state before signing β€” an unstamped agreement may be inadmissible as evidence until the deficiency is paid. Confirm the correct stamp duty and process for your state before execution.
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