- ABC Ltd is a Singapore company owned by an American citizen that wants to expand its agricultural commodity wholesale business to India through a digital platform. - It is considering two structures: issuing convertible notes in Singapore and then bringing funds to India, or having an Indian holding company with foreign subsidiaries. - Key questions include the optimal legal structure and process for the Indian operations and compliance with Indian and foreign exchange laws regarding fund transfers.

1. ABC Ltd
Issues for consideration

2. Background
• ABC Ltd is a company incorporated under the laws of
Singapore
• Its sole shareholder, Mr. Amar, is a citizen of the United
States of America
• Mr. Srikanth, an Indian citizen, is a director at the company,
• Company was incorporated with the following objectives:
o Wholesale trading of agricultural commodities
o Investment in subsidiaries to conduct business across
the globe
• ABC Ltd wishes to expand its operations in India
• Indian entity to be engaged in the business of wholesale
trading of agricultural commodities through the digital
platform
• Twin objectives of the Indian entity:
o Become a hub for the business intangibles (software,
applications, etc.)
o Provide managed marketplace through which B2B
operations can be carried out
• 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 presence in Singapore
Business expansion
Key differentiators
India
Singapore
USA
Present structure
Mr. ad
ABC Ltd
Mr. ew
100%
Shareholder
Director
(no shareholding)
Once the business presence is established in India, a Dubai national to infuse funds in Akkipet Singapore through convertible notes

3. Issues for consideration – Proposed structure 1
•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.
Chronology of events
•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?
Fund infusion into 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?
Business operations in India

4. Issues for consideration – Proposed structure 2
•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?
Flipped structure
•Can convertible notes be issued from Akkipet India? What is the downside of such an issue to the business/investor?
Fund infusion into 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?
Business operations in India