Article

SEBI cautions investors (PR No. 137/2016)

Securities and Exchange Board of India · sebi.gov.in Free Beginner India

SEBI's press release of 30 August 2016 warning that electronic platforms raising money for companies from the public are neither authorised nor recognised under any securities-market law, since a private placement offered to everyone on a platform contravenes the Securities Contracts (Regulation) Act and the Companies Act.

  • Equity crowdfunding from the general public is not a legal route in India.
  • Raise equity through a private placement to a limited, identified set of investors instead.
Open on sebi.gov.in ↗

The question it answers

  1. Which crowdfunding platform should a startup use in India, and is crowdfunding legal here?

Read with it

  1. SEBI's 2014 consultation paper setting out crowdfunding models (donation, reward, debt, equity) and a possible framework for... sebi.gov.in Article · 66 pages Consultation Paper on Crowdfunding in India Securities and Exchange Board of India
  2. Kickstarter's own eligibility page: creators must meet the requirements of one of its listed countries, which do not include... help.kickstarter.com Article Who can use Kickstarter? Kickstarter
  3. Milaap's own pricing page for donation fundraisers: 0% platform fees, with a relationship manager to help set up a fundraiser. milaap.org Tool Milaap pricing Milaap
  4. A legal analysis of SEBI's 2016 caution, explaining why platforms that open a company's private placement to all their... indiacorplaw.in Article SEBI's Stance on Crowdfunding Platforms Umakanth Varottil, IndiaCorpLaw
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