Regulation 19A - Definitions - Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012

1 [CHAPTER III -A ANGEL FUNDS Definitions. 19A. For the purposes of this Chapter, unless the context otherwise requires, the terms defined herein shall bear the meanings assigned to them below, and their cognate expressions and variations shall be construed accordingly,- (1) angel fund means a sub-category of Venture Capital Fund under Category I- Alternative Investment Fund that raises funds from angel investors and invests in accordance with the provisions of this Chapter. (2) angel investor means any person who proposes to invest in an angel fund and satisfies one of the following conditions, namely, (a) an individual investor who has net tangible assets of at least two crore rupees excluding value of his principal residence, and who: (i) has early stage investment experience, or (ii) has experience as a serial entrepreneur, or (iii) is a senior management professional with at least ten years of experience; Explanation: For the purpose of this clause, 'early stage investment experience' shall mean prior experience in investing in start-up or emerging or early-stage ventures and 'serial entrepreneur' shall mean a person who has promoted or co-promoted more than one start-up venture. (b) a body corporate with a net worth of at least ten crore rupees; or (c) an Alternative Investment Fund registered under these regulations or a Venture Capital Fund registered under the SEBI (Venture Capital Funds) Regulations, 1996. (3) company with family connection means: a. if the angel investor is an individual, i. any company which is promoted by such an individual or his relative; or ii. any company where the individual or his relative is a director; or iii. any company where the person or his relative has control, or shares or voting rights which entitle them to fifteen percent or more of the shares or voting rights in the company. Explanation I: For the purpose of this clause, relative means a person as defined under 2 [sub-section 77 of section 2 of the Companies Act, 2013]. Explanation II: For the purpose of this clause, control shall have the same meaning as assigned to it under sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. b. if the angel investor is a body corporate, i. any company which is a subsidiary or a holding company of the investor; or ii. any company which is part of the same group or under the same management of the investor; or Explanation: For the purpose of this clause, part of the same group and under the same management shall have the same meaning as assigned to it under regulation 23 of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009. iii. any company where the body corporate or its directors/partners have control, or shares or voting rights which entitle them to fifteen percent or more of the shares or voting rights in the company. Explanation: For the purpose of this clause, control shall have the same meaning as assigned to it under sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.] ************** NOTES:- 1 Inserted by the SEBI (Alternative Investment Fund) (Amendment) Regulations, 2013, w.e.f. 16-09-2013 2 Substituted by the SEBI (Alternative Investment Funds)(Amendment) Regulations, 2018, w.e.f. 01-06-2018. Prior to the substitution, it read as section 6 of the Companies Act, 1956 (1 of 1956) .