Startup & venture law in Hyderabad — legal infrastructure for companies built on technology.
India's only startup legal practice with built-in cybersecurity due diligence — covering incorporation to VC funding rounds, FEMA-compliant fundraising instruments to SaaS licensing, with cyber risk assessment built into every transaction.
The instrument founders get wrong
The SAFE note your US-based advisor mentioned isn't a legal instrument here.
A striking number of first-time founders come to us with a SAFE note template downloaded from Y Combinator's site, ready to send to an investor. It's a reasonable instinct — SAFEs are the default in the US market most startup content is written for. But a pure SAFE is not recognised under the Companies Act or FEMA, and an Indian bank will not process it as a reportable foreign inflow. Sending one to a non-resident investor doesn't just risk a rejected filing; it risks the receipt being treated as an unauthorised deposit.
What Indian counsel actually does — and what we do — is replicate the SAFE's commercial logic (valuation cap, discount rate, no fixed maturity feel) inside a convertible note structure that FEMA and the Companies Act genuinely recognise. Under Rule 2(1)(c)(xvii) of the Companies (Acceptance of Deposits) Rules 2014, that means a minimum ₹25 lakh per tranche from a single investor, DPIIT recognition as a precondition, and a conversion or repayment window capped at 10 years. Get the structure right and the round closes cleanly. Get it wrong and it surfaces as a compliance gap in your next round's due diligence — usually at the worst possible moment.
The ESOP side has moved too. For shares allotted on or after 1 April 2026, the tax deferral window for startup employees extended from 48 to 60 months from the end of the relevant tax year — under Section 392(3) read with Section 289(3) of the Income Tax Act 2025. That's a genuinely founder-friendly change, but it only applies if the underlying DPIIT recognition is valid at the time of allotment, which is exactly the kind of dependency a rushed ESOP grant tends to miss.
What founders usually get wrong
Four assumptions that cause the most avoidable startup legal problems
Most of what derails an early-stage legal setup isn't exotic — it's a US-market assumption applied to an Indian structure, or a shortcut taken under fundraising time pressure.
"We'll just use a SAFE note"
A pure SAFE isn't recognised under Indian law. The commercial terms can be replicated inside a FEMA-compliant convertible note — but only if it's structured that way from the start, not retrofitted after a term sheet is signed.
"Incorporation takes a few days"
With clean documents, MCA's SPICe+ process realistically runs 5–15 working days end to end, not the same-day turnaround some marketing pages imply. Planning around the honest range avoids a fundraise deadline built on an optimistic number.
"Angel tax is gone, so DPIIT doesn't matter"
Angel tax abolition and DPIIT recognition are separate benefits. Skipping recognition still costs you the Section 80-IAC tax holiday, ESOP deferral eligibility, and the ability to issue convertible notes to foreign investors at all.
"We'll formalise the ESOP pool later"
Vesting schedules, option pool sizing, and grant documentation drafted after an early hire has already started are the single most common source of company-ending founder and employee disputes — usually surfacing during a fundraise or exit.
What we cover
Startup & venture legal services, day zero to exit
From incorporation through Series A and beyond — every legal touchpoint in a technology company's lifecycle, with cybersecurity awareness built in throughout.
Company Incorporation
Private limited company formation, LLP structuring, OPC setup, foreign subsidiary incorporation, and entity selection for VC-backed startups with global ambitions.
- SPICe+ filing and DIN/DSC processing
- Entity structure advisory (Pvt Ltd / LLP / OPC)
- DPIIT recognition application
- Foreign subsidiary incorporation
Convertible Notes & Term Sheets
FEMA-compliant convertible note drafting, term sheet review, cap table modelling, anti-dilution provisions, liquidation preferences, and pro-rata rights negotiation.
- FEMA-compliant convertible note drafting
- Term sheet review and negotiation
- Cap table modelling
- RBI Form CN and FLA return support
SaaS & API Licensing
Enterprise software licensing agreements, API terms of service, data processing addenda, SLA frameworks, and cloud service agreements that protect IP and limit liability.
- Enterprise SaaS licensing agreements
- API terms of service and DPAs
- SLA and cloud service agreements
- Liability and indemnity structuring
IP Assignment & Protection
Founder IP assignment agreements, trade secret protection, patent filing strategy, software copyright registration, and IP ownership audits before fundraising rounds.
- Founder and employee IP assignment
- Patent filing strategy — 80% fee rebate for DPIIT startups
- Software copyright registration
- Pre-fundraise IP ownership audit
ESOP Structuring
ESOP scheme design, vesting schedules, option pool sizing, and anti-dilution mechanics — structured to preserve the 60-month tax deferral window for eligible employees.
- ESOP scheme design and pool sizing
- Vesting schedule drafting
- Grant and exercise documentation
- Tax deferral eligibility review
VC Funding Round Support
Series A/B transaction support — shareholder agreements, investor rights, board composition, FEMA compliance for foreign investment, and cyber due diligence unique to SIRI.
- Shareholder agreement drafting
- Board composition and investor rights
- FEMA compliance for foreign investment
- Integrated cyber risk assessment
Evidence, not guesswork
SAFE note vs. convertible note vs. priced round — what actually applies in India
Most fundraising content online is written for the US market. Here's how the instruments actually available to an Indian startup compare.
| Instrument | Legal status in India | Minimum ticket | Key requirement |
|---|---|---|---|
| Pure US-style SAFE | Not a recognised instrument | N/A | Cannot be processed as a reportable FEMA inflow |
| FEMA-compliant convertible note | Recognised under Companies Act & FEMA | ₹25 lakh per tranche | DPIIT recognition; 10-year max conversion window |
| Compulsorily convertible preference shares (CCPS) | Recognised, most common priced-round instrument | No statutory minimum | Valuation report from a registered valuer |
| Equity shares (priced round) | Recognised, standard for Series A onward | No statutory minimum | Fair market valuation; FC-GPR filing for foreign investment |
Sources: Companies (Acceptance of Deposits) Rules 2014, Rule 2(1)(c)(xvii); FEMA (Transfer or Issue of Security by a Person Resident Outside India) Regulations 2017; DPIIT G.S.R. 108(E), 4 February 2026. Figures current as of publication — confirm applicable thresholds before structuring a specific round.
What getting this wrong actually costs
Four numbers every founder should know before their next round
Rate previously applied under angel tax before its abolition — a reminder of why structuring matters even now that this specific risk is gone.
Per-tranche minimum from a single investor under the Companies (Acceptance of Deposits) Rules — below this, the receipt risks being treated as an unauthorised deposit.
Window to file the commencement-of-business declaration after incorporation. Miss it and the company cannot commence business or exercise borrowing powers.
Standard review time at SIRI — because a term sheet that sits with counsel for a week can cost a founder the round entirely.
Why SIRI
Your investors will ask about cyber risk. Be ready.
No other firm in India combines attorney-client privilege with technical execution across cybersecurity and startup law — assessed inside the same engagement, not as a separate vendor relationship.
Day zero to exit
We handle your legal infrastructure from incorporation through every funding round to M&A exit — with consistent counsel who understands your tech stack, not a new firm for every stage.
Cyber risk in every deal
Unlike traditional law firms, we assess cybersecurity posture in every transaction — because investors increasingly require it as part of due diligence, and a clean report closes rounds faster.
Startup-speed execution
Term sheet reviewed in 24 hours. Incorporation guided through the realistic 5–15 day MCA window with no surprises. We move at startup speed without compromising on legal quality.
Fixed-fee transparency
No surprise invoices. Our SIRI Shield startup retainer gives unlimited legal queries, document reviews, and quarterly cyber assessments on a fixed monthly fee.
Who we work with
Founders across every stage and sector
From pre-seed incorporation to Series C investor documentation — the corporate needs of an idea-stage founder and a growth-stage CEO are different problems, handled by the same integrated team.
How we work
From first conversation to a closed round
Free assessment
A complimentary consultation to review your current legal structure, stage, and immediate fundraising or incorporation needs.
Day 1Gap & structure review
We identify gaps in incorporation, IP assignment, DPIIT recognition, or ESOP documentation before they become diligence findings.
Week 1Execution
Incorporation, instrument drafting, term sheet negotiation, or ESOP structuring — executed at startup speed with real-time counsel.
Deal timelineOngoing counsel
Standing support through the next round, the next hire, and the next regulatory change — so your legal foundation doesn't go stale.
OngoingFrequently asked
Startup & venture law, answered directly
Can an Indian startup issue a SAFE note to investors?
Not in its original US form. A pure Y Combinator-style SAFE is not a recognised instrument under the Companies Act or FEMA, and Indian banks will not process it as a reportable foreign inflow. What Indian counsel typically does is replicate the SAFE's commercial terms — valuation cap, discount rate, no fixed maturity feel — inside a FEMA-compliant convertible note structure, which is the instrument Indian law actually recognises for pre-priced-round fundraising.
What is the minimum ticket size for a convertible note in India?
Under Rule 2(1)(c)(xvii) of the Companies (Acceptance of Deposits) Rules 2014, a convertible note requires a minimum investment of ₹25 lakh in a single tranche from a single investor, with a maximum conversion or repayment window of 10 years. The issuing company must be DPIIT-recognised for the instrument to qualify.
Is angel tax still a risk for Indian startups in 2026?
No. Angel tax under Section 56(2)(viib) was fully abolished for all investors effective 1 April 2025. Before abolition, DPIIT-recognised startups already had an exemption; the 2025 change removed the provision for all companies, not just recognised startups — though DPIIT recognition still unlocks separate benefits like the Section 80-IAC tax holiday and ESOP deferral.
How long does ESOP tax deferral last for startup employees?
For shares allotted on or after 1 April 2026, the ESOP perquisite tax deferral extends to 60 months from the end of the relevant tax year of allotment, up from the previous 48-month window, under Section 392(3) read with Section 289(3) of the Income Tax Act 2025. The deferral requires the underlying company to hold valid DPIIT recognition at the time of allotment.
How long does company incorporation actually take?
With clean, complete documentation, MCA's SPICe+ process typically takes 5–15 working days from filing to Certificate of Incorporation, with most straightforward filings landing in the 7–10 day range. DSC and DIN processing runs 1–3 days, name approval 1–3 days, and final incorporation review 3–5 days. AGILE-PRO-S now bundles GSTIN, EPFO, ESIC, and bank account setup into the same filing, which used to add 30 or more separate days.
What does the free startup consultation cover?
A substantive review of your current legal structure and stage — incorporation status, DPIIT recognition, IP assignment, and any upcoming fundraising or hiring plans. We identify gaps and propose a plan scaled to your stage, with no obligation to proceed and no fee for the initial consultation.
Ready when you are
Build on solid legal and cyber foundations.
Book a free consultation for your startup. We'll review your current legal structure, identify gaps, and propose a plan scaled to your stage.
Related services
Other ways SIRI Law LLP supports growing companies
Corporate & commercial law
M&A due diligence, contracts, and governance — with cyber risk assessed inside every deal.
Data privacy & cybersecurity law
DPDP Act compliance, consent architecture, and breach notification protocols.
AI & emerging technology law
EU AI Act compliance, LLM vendor contracts, and algorithmic liability.
Visit or contact us
SIRI Law LLP — Hyderabad, India
| Registered office | HITEC City, Madhapur, Hyderabad, Telangana 500081, India |
| Telephone | +91 79819 12046 |
| info@sirilawllp.com | |
| Other offices | New Delhi, India · Austin, Texas, USA · Online worldwide |
| Hours | Mon–Sat, 9:30 AM – 7:00 PM IST · Emergency line 24/7 |