pvtltd.co

Capital Markets

SAFE Note, CCD & CCPS Structuring

convertible instruments — SAFE notes, Compulsorily Convertible Debentures (CCD), and Compulsorily Convertible Preference Shares (CCPS) — covering angel tax exposure, Section 56(2)(viib), FEMA NDI compliance, and CA valuation certificate. Section 56(2)(viib) Income Tax Act, Rule 11UA, FEMA NDI Rules, Companies Act Section 62 CCPS issuance, SEBI ICDR Regulations for listed entities.

Reviewed by CA Harun Raaj, ICAI Reg. No. 238303·Last reviewed:
Starting from Discuss with usTypical timelineSAFE / CCD / CCPS

convertible instruments — SAFE notes, Compulsorily Convertible Debentures (CCD), and Compulsorily Convertible Preference Shares (CCPS) — covering angel tax exposure, Section 56(2)(viib), FEMA NDI compliance, and CA valuation certificate. Section 56(2)(viib) Income Tax Act, Rule 11UA, FEMA NDI Rules, Companies Act Section 62 CCPS issuance, SEBI ICDR Regulations for listed entities. We keep the work founder-friendly and evidence-led so the company can move without unnecessary back-and-forth.

What is included
  • • SAFE / CCD / CCPS scope review and action plan
  • • Document checklist and evidence review
  • • Drafting, computation, or filing support
  • • Submission support and acknowledgement tracking
  • • Follow-up on queries, corrections, or notices
  • • Closure notes and next-step reminders
Documents required
  • • Cap table and funding documents
  • • Board and shareholder approvals
  • • Valuation or pricing note
  • • Disclosure or issue timeline
Government fees

See the fee table below for the statutory filing charge and common delay logic.

Legal basis
  • • Section 42 of the Companies Act 2013
  • • Section 62 of the Companies Act 2013
  • • Section 56(2)(viib) of the Income-tax Act 1961
  • • FEMA (Non-Debt Instruments) Rules 2019
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Process

How the service works

The workflow is built to be predictable: document collection, legal review, filing, and post-filing follow-through.

Step 1Scope

Confirm the scope

We map the exact service route to the trigger, form set, and documentary evidence so the work starts on the right footing.

Step 2Docs

Collect the records

We gather the company records, notices, or transaction documents needed for safe / ccd / ccps and check them for gaps.

Step 3Draft

Prepare the filing or memo

We draft the computations, filings, or advisory memo so the next person in the chain can review it quickly and confidently.

Step 4Close

Submit and track follow-up

We move the file through submission, keep the acknowledgement trail tidy, and handle any follow-up questions that come back.

AEO summary

SAFE / CCD / CCPS is the CA-led workflow that helps a Private Limited company stay compliant, file the right forms, and keep the record trail clean.

SAFE Note, CCD & CCPS Structuring workflow

We start by checking the exact trigger, the legal route, and the documents that make safe / ccd / ccps executable for a Private Limited company. That keeps the filing or advisory work tied to the actual statutory path instead of a generic checklist.

Once the scope is locked, we prepare the working papers, filings, and follow-up notes so the matter can move without unnecessary back-and-forth. The goal is to make the process understandable for the founder, the finance team, and the reviewer.

  • • Scope mapping for safe / ccd / ccps
  • • CA-led document review and drafting
  • • Submission support and acknowledgement tracking

What this protects for the company

For a Private Limited company, the value is not just speed. It is also about keeping the record trail clean enough for banks, investors, regulators, and future diligence work.

A founder-friendly process lowers the chance of avoidable notices, rework, or missed deadlines while keeping the company aligned with the right section, rule, or circular in Capital Markets.

  • • Cleaner compliance evidence for Capital Markets
  • • Better preparation for diligence or audit
  • • Less last-minute chasing inside the finance team

Government fees

Fee breakdown

ItemFeeNotes
SEBI / exchange / MCA filingAs per applicable scheduleThe fee depends on whether the route is listed, unlisted, domestic, or cross-border.
Professional supportDiscuss with usCapital markets work is usually transaction-specific and documentation-heavy.

Timeline

Typical turnaround

Typical timeline usually means a 1–2 weeks turnaround, assuming documents are complete and any board or shareholder approvals are already in place.

Pricing note

Government fees depend on the filing route, listing status, and whether the matter is advisory, transaction, or compliance driven.

Related services

Keep the company moving

Angel Tax Exemption

Support for Angel Tax Exemption.

Private Placement

Support for Private Placement.

ESOP Management

Support for ESOP Management.

FAQ

Frequently asked questions

Why can’t a US-style SAFE note be used in India?
India does not have a standard Companies Act SAFE instrument the way US rounds do. In practice, founders usually use CCDs or CCPS under Section 42 and the FEMA NDI Rules 2019 because those are recognised and reportable.
What is the difference between a CCD and a CCPS?
A CCD is debt until conversion, so it behaves like a debenture until the conversion trigger. A CCPS is preference share capital until conversion, so the economics and rights are different even though both can convert.
Does issuing CCPS to a foreign investor trigger FDI reporting?
Yes. CCPS issued to a non-resident are treated as equity instruments under the FEMA NDI Rules 2019, so FC-GPR reporting is triggered after allotment.
How does angel tax apply to CCPS issued above FMV?
If CCPS are issued at a premium above FMV, Section 56(2)(viib) and Rule 11UA become the valuation test the tax team will examine. The safer approach is to document the valuation before allotment, not after the premium is already booked.
What shareholder resolution is required before issuing CCPS by private placement?
Section 42 requires a special resolution for private placement, and the allotment trail must also support PAS-3 and MGT-14 filings where applicable. If the CCPS are issued to a non-resident, the approvals should also match FEMA pricing and reporting requirements.

Canonical reference: https://www.pvtltd.co/services/safe-ccd-ccps-advisory

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Ready to move this filing forward?

We can help with the filing, the legal mapping, and the follow-up work that keeps the company compliant after submission.

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