ABC Ltd

Issues for consideration

Background

Key differentiators
• Just-in-time inventory model
Maintain zero or very less inventory to cater to the needs
of the customers
• Hybrid model
Open kiosks in tier-II cities to showcase the samples and
facilitate online booking
Business expansion
• ABC Ltd wishes to expand its operations in India
Present structure
• Indian entity to be engaged in the business of wholesale
trading of agricultural commodities through the digital
platform Mr. ad ABC Ltd
• Twin objectives of the Indian entity: 100%
Business presence in Singapore o Become a hub for the business intangibles (software, Shareholder
applications, etc.)
• ABC Ltd is a company incorporated under the laws of o Provide managed marketplace through which B2B
Singapore operations can be carried out USA Singapore
• Its sole shareholder, Mr. Amar, is a citizen of the United
States of America India
• Mr. Srikanth, an Indian citizen, is a director at the
company, Mr. ew
• Company was incorporated with the following objectives: Director
o Wholesale trading of agricultural commodities (no shareholding)
o Investment in subsidiaries to conduct business across
the globe

Once the business presence is established in India, a Dubai national to infuse funds in Akkipet Singapore through convertible notes
Issues for consideration – Proposed structure 1

Chronology of events

• Is the chronology of events (Gifting of shares, incorporating a subsidiary in India, issuing convertible notes in Singapore, fund infusion
into India) in line with the provisions of the extant laws? If not, prescribe a chronology of events that we can adopt.

Fund infusion into India

• After Akkipet Singapore raises funds through convertible notes, what is the efficient mode through which such funds can be brought
into India (capital/revenue) and what are the implications of such receipt under FEMA/tax laws? Alternatively, can convertible notes
be issued from Akkipet India?

Business operations in India

At present, in India, the operations are already being carried out through an LLP. What is the most optimal way of continuing the
operations in India?
•Should the LLP be converted into a private limited company and thereafter, a subsidiary?
•Should a new company be formed and a slump sale/itemized sale be made from the LLP?
•Should a new company be formed and the LLP die a slow death?
Are there any other options we can explore?
Issues for consideration – Proposed structure 2

Flipped structure

• Is flipping the structure (Indian holding company and subsidiaries/franchisees across the world) a viable option? Are there any
implications for the same under FEMA/tax laws?

Fund infusion into India

• Can convertible notes be issued from Akkipet India? What is the downside of such an issue to the business/investor?

Business operations in India

At present, in India, the operations are already being carried out through an LLP. What is the most optimal way of continuing the
operations in India?
•Should the LLP be converted into a private limited company and thereafter, a subsidiary?
•Should a new company be formed and a slump sale/itemized sale be made from the LLP?
•Should a new company be formed and the LLP die a slow death?
Are there any other options we can explore?