Indian equity crowdfunding platforms are under scrutiny after the Registrar of Companies, NCT of Delhi and Haryana penalized two companies that had raised funding via the crowdfunding platform Tyke.
The ROC held that the use of such platforms by companies for fundraising constitutes a contravention of Section 42(7) whereby a private placement issue and subscription is restricted to 200 persons. This development poses serious questions on the legality of the crowdfunding platforms and the adverse impact of such ROC orders on the funding opportunities for the startup ecosystem.
In this article published by Mondaq, our team comprising of Partner Anupam Shukla, Senior Associate Vedika Shah and Paralegal Shreya Masalia track the developments and explains the contentions of the ROC in detail.
You can read the article here -https://lnkd.in/eU7JFQnZ
