With our expertise and experience in the field of corporate and securities law, as well as our in-depth knowledge of the Indian regulatory landscape, Pentacles Legal Partners is well-equipped to guide clients through the entire process of setting up an AIF in India, ensuring compliance with regulatory requirements and facilitating the smooth establishment and operation of the fund.

Legal Consultation

We offer initial consultations to understand your specific requirements and objectives for setting up an AIF in India. Our legal experts will provide personalized advice tailored to your needs. We advice on the regulatory framework governing AIFs in India, including compliance requirements, registration procedures, and regulatory filings.

Structuring and Formation

Our team provides guidance on structuring the AIF, whether it is established as a trust, company, limited liability partnership (LLP), or another form of entity, considering factors such as investor requirements, taxation, and regulatory compliance.

Regulatory Compliances

Our team ensures compliance with all applicable laws, regulations, and guidelines governing the establishment and operation of AIFs in India, including registration requirements ,eligibility criteria, investment policy, disclosure norms, and reporting obligation with the Securities and Exchange Board of India (SEBI).

Documentation Drafting

We draft and review all necessary legal documents, including offering memorandums, partnership agreements, trust deeds, and incorporation documents, to formalize the establishment of the AIF and define its operational framework

Due Diligence

We conduct thorough due diligence to ensure that the proposed AIF structure and operations comply with regulatory requirements and industry best practices, mitigating legal risks and potential liabilities.

Investor Relations

We assist in developing investor communication strategies and preparing documentation for investor onboarding, ensuring transparency and compliance with disclosure obligations. Our team can assist in drafting investor agreements, subscription documents, and other investor-related documentation, facilitating smooth fundraising and investor onboarding processes.

Negotiation and Contracting

Our team assists in negotiating agreements with investors, fund managers, service providers, and other stakeholders involved in the setup and operation of the AIF.

Dispute Resolution

In the event of disputes or regulatory inquiries, our experienced litigation team provides representation and advocacy to protect the interests of the AIF and its stakeholders.

Ongoing Compliance Support

Pentacles Legal Partners provides ongoing legal support and advisory services to AIFs post-incorporation, including compliance monitoring, regulatory updates, and assistance with ongoing operational and governance matters.

Definition

Alternative Investment Funds (AIF) mean any fund established or incorporated in India, which can be in the form of a trust, company, limited liability partnership, or body corporate.

Purpose

Serves as a privately pooled investment vehicle, gathering funds from both Indian and foreign investors. These funds are then invested based on a predefined investment policy, aiming to benefit its investors.

Legal Form of AIF

Trust

Limited Liability Partnership

Company or

Body Corporate

Exclusion from Regulations

Not covered under the Securities and Exchange Board of India (SEBI) Mutual Funds Regulations, 1996, Securities and Exchange Board of India (SEBI) Collective Investment Schemes Regulations, 1999, or any other regulations by the SEBI to regulate fund management activities.

Exemptions from Being Classified as AIFs

Certain entities are excluded from the definition of Alternative Investment Funds. These include family trusts established for the benefit of 'relatives' as defined under the Companies Act, 2013, ESOP Trusts established under specific regulations, employee welfare trusts or gratuity trusts for employees' benefit, 'holding companies' as defined under the Companies Act, 2013, among others.

Exemptions from Being Classified as AIFs II

Other exclusions involve special purpose vehicles not established by fund managers and regulated under specific regulatory frameworks, funds managed by securitization or reconstruction companies registered with the Reserve Bank of India under specific acts, and pools of funds directly regulated by other regulators in India.

Category I AIF

Venture capital funds (Including angel funds)

SME funds

Social venture funds

Infrastructure funds

Category II AIF

Real estate funds

Private equity funds (PE funds)

Funds for distressed assets,

Categories III AIFs

Funds that engage in many complex trading techniques, for example, investing in listed or unlisted derivatives.

Various types of funds such as hedge funds and private investment in public equity (PIPE) funds