Convertible Notes: A Deep Dive into a Popular Startup Funding Instrument
Convertible notes are short-term loans that convert into equity, used during startup seed funding to defer valuation. They involve accrued interest, possible conversion events, and contain terms like valuation cap and discount rate. While offering flexibility and benefits to early investors, improper structure can lead to high costs and ownership dilution. Startups should seek fair terms and legal advice for efficient fundraising.
How to Declare and Pay Dividends in Accordance with Companies Act 2013
In India, the Companies Act 2013 outlines the legal process for declaring and paying dividends, involving verification of profits, board and shareholder meetings, timely deposits, and payment within prescribed periods. Companies must maintain accurate records, ensure tax compliance, and address shareholder grievances, all while adhering to corporate governance practices and periodically checking for legal updates.