MIS Setup After a Funding Round

A closed round changes who reads your numbers, how often, and what follows when a report is late. MIS setup for a newly funded startup in India is a contract exercise before it is a finance exercise, because the shareholders agreement (SHA) and share subscription agreement (SSA) already state what investors are owed. The Companies Act, 2013 and the Foreign Exchange Management Act (FEMA), 1999 add filing clocks that run beside those duties. This article converts all of it into an MIS specification, a reporting calendar and a 90 day build, on rules as they stand in October 2026.

What MIS should be set up after a funding round closes?

Set up three things in order: an information rights register drawn from the signed SHA and SSA, a locked KPI dictionary, and a monthly pack that reconciles to closed books and the cap table. The register decides what is owed, the dictionary decides what each number means, and the pack decides when investors see it. A dashboard comes after these three, not before.

Why does MIS setup for a newly funded startup begin with the signed documents?

The obligation to report is contractual, not statutory. The Companies Act, 2013 requires books of accounts (Section 128), annual financial statements (Section 129) and a minimum board meeting cadence (Section 173(1)), but it does not prescribe a monthly MIS for a private company. The SHA does. Whatever it promises, in the format and by the date it names, is the specification you build to.

Before the round, the MIS served one reader: the founder. After the round it serves three, and each reads for a different reason. Investors read under contract. The board reads under statute and under the SHA’s board clauses. The founder reads to run the business. A funded company that builds three separate reporting routines ends up with three versions of revenue.

The fix is structural: run one close and cut three views from it.

Each topic below already has a full Treelife guide, so only a pointer appears here and this article covers the contract to MIS layer that none of them address:

• What an MIS report is and its types: MIS reports guide
• The master KPI list and review cadence: MIS reporting for founders
• Outsourcing, delivery clock and fees: monthly MIS reporting services
• Board pack contents and sign off: board reporting pack preparation
• Dashboard tiles and data sources: financial dashboard services for startups
• Variance thresholds and commentary: budget vs actual variance reporting
• Burn and runway arithmetic: burn rate and runway calculation
• Hiring, systems and controls after seed: finance function setup after seed funding
• What a virtual CFO engagement covers at each stage: scope of virtual CFO services

How do you turn the SHA information rights clause into an MIS specification?

Extract every clause that creates a reporting duty, then convert each into four fields: the output, the owner, the cutoff and the due date. Information rights, budget approval, audit rights, board materials, reserved matters, use of proceeds and tranche conditions all create duties. The clauses outside the information rights article are the ones most often missed.

Work through the signed documents in this order:

1. Pull every reporting duty from the SHA, the SSA, the term sheet and any investor side letter. Side letters are where a single investor’s extra rights sit.
2. Record the entitlement tests: a major investor threshold, a shareholding percentage, a board seat or an observer seat. These decide who receives what.
3. Convert each duty into a named output, such as a monthly pack, a budget file or a consent log.
4. Assign an owner and a due date counted in working days after month end.
5. Annex the finished register to the next board minutes, so the whole board has accepted it.

Table 1: Information rights register (clause wording differs by deal, so read your signed text)

Clause source	What it typically requires	MIS output it creates	Owner and clock
Information rights article	Monthly or quarterly management accounts within a stated number of days of period end	Monthly pack from the closed ledger	Finance lead, by the contractual working day
Budget clause	Annual budget and operating plan approved before the year starts	Budget version history and a plan versus actual view	CEO and finance lead, before the first day of the financial year
Audit and accounts clause	Audited financial statements within a stated period after year end	Audit close calendar and a reconciliation of pack to audited numbers	Finance lead and statutory auditor
Inspection right	Access to books, records and management on notice	Index of records and a standing data room	Company secretary
Board and observer clause	Board materials circulated ahead of each meeting	Board view built from the same close	CEO and company secretary, before the notice date
Reserved matters	Prior investor consent for named actions above a threshold	Consent watchlist with a running balance against each threshold	CEO, tracked continuously
Use of proceeds clause	Proceeds applied to agreed heads only	Proceeds schedule: planned against actual by head	Finance lead, monthly
Milestone or tranche conditions	Later tranches released on stated conditions	Milestone tracker with an evidence reference	CEO and finance lead, per tranche

The rows show typical clause families drawn from practice. They do not replace reading your own documents.

One drafting gap needs attention before the first pack. Many SHAs say “management accounts” or “in a form acceptable to the investor” without defining the contents, the cutoff or who accepts the form. If your SHA is silent, agree a sample pack in writing with the lead investor, and attach it to the board minutes. This takes one email and removes the most common source of later dispute.

Investor reporting setup after a funding round: who gets what, and when

Investor reporting setup after a funding round should issue one set of numbers to every investor and vary only the depth. The lead investor with a board seat receives the full pack and board materials, threshold investors receive the contractual set, and smaller holders receive a summary. The numbers stay identical because every pack becomes diligence evidence for the next round.

Table 2: Reporting entitlements by investor type (typical practice, confirmed against your SHA)

Investor type	Typical entitlement	Delivery form	Watch point
Lead investor with board seat	Full pack, budget, board materials, inspection	Monthly pack plus board pack	Receives queries first, and its format becomes the default for others
Investor above the major investor threshold	The contractual financial set	Monthly or quarterly pack	Threshold wording: percentage or amount, and whether it is retested at each round
Angel and smaller holders	Annual financial statements, plus a quarterly summary if agreed	Summary note plus statutory statements	Do not promise monthly detail in an email
Board observer	Board materials without a vote	Board pack	Confidentiality and recusal on conflicted items
Foreign investor	The contractual set, plus a cap table that matches FIRMS	Pack plus cap table extract	Entity Master and cap table must agree
AIF investor	The contractual set, plus valuation and portfolio data for its own reporting	Pack plus a data request schedule	Its reporting calendar differs from yours
Venture debt lender	Covenant compliance certificate and periodic financials	Pack plus certificate	Covenant tests use the lender’s definitions, not yours

Cadence follows the SHA first. Where the SHA is silent, a workable default is a monthly pack for the lead investor and the board from Series A onwards, a quarterly pack for investors above the threshold, and annual statements plus a short summary for smaller holders.

Should every investor receive the same MIS?

Every investor should receive the same numbers, with depth set by entitlement. Different figures for different investors create reconciliation work, and the next investor’s counsel will compare packs from your data room. Tailor the cover note and the number of pages, never the definitions or the totals.

The practical rule is one pack, one version, one archive. The lead investor’s questions go into the next pack’s notes so every holder on the register sees the answer. A holder below the threshold who asks for more than the SHA gives is making a request, not exercising a right. A short monthly flash on the same definitions usually costs less than the goodwill lost by refusing.

How should the investor note sit on top of the pack?

The pack carries the contractual numbers and the investor note carries the explanation. Send them together, keep the note short, and never let the note state a figure that the pack does not show. The pack answers what the SHA requires. The note answers what a reader will ask next.

A workable note has four parts:

• Headline: one paragraph on what changed in the month, measured against the approved budget.
• Misses: each with its cause and the corrective action, so the note reads as management and not as excuse.
• Cash: free cash, restricted cash and runway on free cash, taken straight from the pack.
• Asks: one or two specific requests, such as a named introduction or a role brief, not a general call for help.

The note is not the board pack. The board pack carries decisions and statutory items for directors, while the note is information for every investor on the register, so the two share numbers but not content.

Illustrative investor note, month ended 30/09/2026. All figures are illustrative.

Headline: Revenue was ₹1.9 crore against a plan of ₹2.1 crore. Two enterprise renewals slipped into October.

Misses: Sales hiring is two roles behind plan because offers were declined. Full year headcount is unchanged.

Cash: Free cash is ₹6.4 crore and restricted cash is ₹1.5 crore, being the second tranche pending a milestone. Runway on free cash is 14 months.

Asks: Introductions to two heads of finance at mid market logistics companies.

Treat each note as a record. Archive it with its pack, because the next investor will read twelve months of notes against the numbers. Bad news goes out the same day it is confirmed when the SHA names the event, such as a key person exit or a material dispute, and in the next note otherwise. Send through blind copy or a portal, since an open email chain shows who else holds shares. Check the confidentiality clause before sharing unit economics with anyone who is not on the register.

What changes for foreign, AIF and lender investors?

Three investor types add work beyond the standard pack:

• Foreign investor: an issue of equity instruments to a person resident outside India is reported in Form FC-GPR on the Foreign Investment Reporting and Management System (FIRMS) within 30 days of issue (Reserve Bank of India (RBI) Master Direction on Reporting under FEMA, 1999, updated 01/10/2026). The cap table in your pack must equal the Entity Master. The detailed filing steps are in the FC-GPR filing guide. If the investor or its beneficial owner is from a country sharing a land border with India, also check Press Note 2 (2026 Series) dated 15/03/2026 and the Foreign Exchange Management (Non-debt Instruments) (Amendment) Rules, 2026 dated 01/05/2026, which changed the approval and reporting steps, and add those steps to the register.
• AIF investor: it reports to its own investors on its own calendar, so it will ask for valuation inputs and portfolio data on dates you did not choose. Put those dates in the register on day one. The fund side view is covered in investor relations and reporting services.
• Venture debt lender: it tests covenants on its own definitions and expects a compliance certificate with each pack. Match the certificate to the loan agreement before the first test date. For the structure itself, see venture debt vs equity funding.

How do you report use of proceeds and consent thresholds after the round?

Track proceeds as a separate schedule that compares planned and actual use by head, drawn from the approved post closing budget, and track consent thresholds as a live watchlist against the reserved matters. The first shows investors where the money went. The second shows whether management needed approval before spending it. Both start on the closing date, not at the first board meeting.

The proceeds schedule has five parts:

1. Gross proceeds received and the date each tranche landed.
2. Round costs deducted, to reach net proceeds.
3. The use heads named in the SSA or the approved budget, such as hiring, product, sales and working capital.
4. Planned against actual spend by head, month to date and cumulative.
5. Cash split into free and restricted, because later tranches or escrowed amounts are not available to spend.

Define free cash in writing: bank balances, less fixed deposits pledged against credit lines, less application money not yet allotted, less any balance the SHA restricts. TDS receivable and GST input credit are assets, not cash, so they stay out of the runway numerator.

Share application money needs its own line until shares are allotted. A company allotting securities by private placement must allot within 60 days of receiving the application money, or repay within 15 days after that period ends, with interest at 12 per cent a year from the sixtieth day if repayment is late (Section 42(6), Companies Act, 2013). The money must sit in a separate bank account and cannot be used before allotment (Section 42(4) and its proviso). The MIS should show the date the money arrived and the days left, so the allotment never slips unnoticed.

The consent watchlist works the other way. List every reserved matter that carries a number, such as capital expenditure above a limit, hiring above a salary band, or a related party transaction above a value. Against each, keep a running balance of what has been spent or committed. When a threshold is within reach, the watchlist tells the CEO to seek consent before signing, not after.

What must be settled before the first MIS goes out: books, tie outs and definitions?

Three things must be settled: a closed and reconciled month with an audit trail, tie outs between the books, the cap table and the regulatory records, and a locked KPI dictionary. If any one is missing, the first pack will carry a number that the second pack changes. Investors forgive a late first pack. They do not forgive a restated one.

Which tie outs does the first post closing month need?

The first post closing month carries items that never appeared in your earlier MIS: new share capital, securities premium, round costs, restricted cash and a changed cap table. Each needs a source of truth and a second record it must agree with.

Table 3: Closing month tie outs

Item	Source of truth	Must tie to	Who signs
Paid up capital and securities premium	Allotment resolution and return of allotment	Ledger share capital and securities premium accounts (Section 52, Companies Act, 2013)	Finance lead and company secretary
Shareholding by holder	Register of members (Section 88, Companies Act, 2013)	MIS cap table and each investor’s own records	Company secretary
Foreign investment received	Bank credit advice and FC-GPR on FIRMS	Ledger receipts and the FIRMS Entity Master	Finance lead
Round costs	Engagement letters and invoices	Treatment adopted in the close, agreed with the auditor	Finance lead and auditor
Restricted and free cash	Bank statements, including the application money account	Cash lines in the pack	Finance lead
Demat holdings	Depository statements and the half yearly Form PAS-6 reconciliation (Rule 9B, Companies (Prospectus and Allotment of Securities) Rules, 2014, for private companies other than small companies)	MIS cap table and the register of members	Company secretary
ESOP pool	ESOP scheme and board approvals	Fully diluted lines in the cap table	Company secretary

A private company that is not a small company must issue securities only in dematerialised form under Rule 9B, so its depository records become a third source for the cap table. The mandatory demat guide explains who is covered.

Round costs deserve a decision, not a default. Whether they are charged to securities premium or to the profit and loss account depends on the permitted uses in Section 52 of the Companies Act, 2013 and on the accounting framework the company follows. Settle the treatment with the statutory auditor before the first pack, so the number is stable.

The accounting software matters too. Companies using accounting software must use a version with an audit trail of every edit that cannot be switched off (proviso to Rule 3(1), Companies (Accounts) Rules, 2014, applicable from 01/04/2023). A pack built on software without that trail will be questioned in the next diligence.

For FY 2026-27, tax lines in the pack follow the Income-tax Act, 2025, in force from 01/04/2026, which counts the year as tax year 2026-27. Tax deducted at source on payments other than salary now sits under Section 393, and the test is the earlier of credit or payment: if that date falls on or before 31/03/2026 the Income-tax Act, 1961 still governs, and if it falls on or after 01/04/2026 Section 393 governs. A pack that straddles the changeover should show both references.

How do you lock KPI definitions so numbers do not drift between investors?

Write each KPI as a one line formula with its source system, cutoff date and owner, get the lead investor’s written acceptance, and change it only through a restatement note. A dictionary of 8 to 12 metrics is enough. The aim is stability, not coverage, and drift usually starts after a weak quarter.

Table 4: KPI dictionary, what to fix in writing

Metric	Definition to fix	Common drift	Control
Revenue	Recognised, billed or collected, and net of which taxes	Pack shows billed, board deck shows recognised	One basis, stated in the footnote of every pack
ARR or GMV	What is included: one time fees, usage, discounts, taxes	One off fees creep into the run rate	Inclusion list accepted by the lead investor
Gross and net burn	Whether GST outflows, founder pay, capex and financing flows count	Burn quoted before statutory outflows	Cash basis, reconciled to the bank
Headcount	Employees, contractors, and offers accepted but not joined	Joiners counted at offer	Payroll register as the source
Churn	Logo or revenue, monthly or annual, and the treatment of downgrades	Metric changes after a bad quarter	Restatement rule: note in the next pack and a same day message to everyone on the register

The metric set itself differs by business model, so take the list from MIS reporting for founders and use the dictionary only to fix definitions. A restated number carries a note in the next pack and a same day message to every investor on the register. Write the dictionary as a schedule to the next SHA, so it survives the following round. For benchmark values by stage, see SaaS metrics investors track.

The 90 day build: from closing to first live investor pack

Run the build in four phases over about 90 days: extract the register, settle books and definitions, dry run on one closed month, then issue the first live pack. The 90 days is a planning window, not a legal limit. Shorten it if the SHA names an earlier first reporting date, and issue an interim pack in that case.

Table 5: The 90 day build

Phase	Days	Output	Exit test
1. Extract	1 to 15	Information rights register and owner map	Every duty has an owner and a due date, and the lead investor has confirmed the register
2. Settle	16 to 45	Chart of accounts mapped to pack lines, draft KPI dictionary, closing month tie outs	Books reconcile to bank, and the cap table agrees with the register of members and FIRMS
3. Dry run	46 to 75	One full month produced as a draft pack	No unexplained difference against the board view or any number already sent to an investor
4. Issue	76 to 90	First live pack, archive, and a 12 month calendar	Pack issued by the contractual date, and investor feedback logged

The 12 month calendar in phase four should carry the clocks that run beside the pack:

• Board meetings: at least four a year, with no more than 120 days between two consecutive meetings (Section 173(1), Companies Act, 2013), subject to the relaxations for one person, small and dormant companies.
• Board notice: not less than seven days in writing to every director (Section 173(3), Companies Act, 2013), with the agenda and notes on agenda at least seven days before the meeting (clause 1.3.7, Secretarial Standard 1 (SS-1)). Urgent business can go at shorter notice if an independent director, where the company has one, attends.
• Advance reporting of foreign investment: the receipt of consideration is reported on FIRMS through the authorised dealer bank within 30 days of receipt, ahead of the FC-GPR (RBI Master Direction on Reporting under FEMA, 1999, updated 01/10/2026).
• Foreign investment reporting: Form FC-GPR within 30 days from issue of equity instruments (same Master Direction).
• Annual return on foreign liabilities and assets (FLA): by 15 July each year on the FLAIR portal, unless the RBI extends the date for the year, for companies with foreign investment outstanding.
• Application money: allotment within 60 days of receipt (Section 42(6), Companies Act, 2013).
• Return of allotment: Form PAS-3 within 15 days of allotment for a private placement (Section 42(8), Companies Act, 2013, read with Rule 14(6) of the Companies (Prospectus and Allotment of Securities) Rules, 2014).
• Contractual dates: first pack, budget approval, audited accounts and any tranche conditions from the register.

The Corporate Laws (Amendment) Bill, 2026 proposes changes to Section 42 and Section 173(5) of the Companies Act, 2013. The Joint Parliamentary Committee tabled its report on 03/08/2026 and the Bill has not been passed, so the provisions cited above apply until the changes are notified.

What does the first live pack contain?

The first live pack keeps the pre round statements and adds five sections that the round created: share capital and cap table, proceeds schedule, free and restricted cash, consent watchlist and a clocks status page. Everything else carries over from the earlier MIS, so the new content is small and the reconciliation is where the time goes.

Table 6: First live pack, new and carried over sections

Section	New after the round?	Source	Reader
Investor note	New	Management, drawn from the pack	Every investor on the register
P&L, balance sheet and cash flow	Carried over	Closed ledger	Every investor on the register
Free and restricted cash	New	Bank statements and the application money account	Lead and threshold investors
Share capital and cap table	New	Register of members and the FIRMS Entity Master	Lead and foreign investors
Proceeds schedule	New	Approved post closing budget and the ledger	Lead investor
Consent watchlist	New	Reserved matters in the SHA	Lead investor and board
KPI page with definitions footnoted	Carried over, definitions locked	KPI dictionary	Every investor on the register
Clocks and covenants status	New	Calendar from phase four	Lead investor, lender, foreign investor

What does the monthly cycle look like once the build is done?

Work backwards from two dates: the day the SHA says the pack is due, and the date the board notice must go out in a board month. Whichever falls first sets the close deadline, and every step below is scheduled against it. The delivery clock for outsourced packs is covered in monthly MIS reporting services.

1. Close the ledgers, bank, payroll and accruals. Owner: finance lead.
2. Run the tie outs: cap table, restricted cash, application money clock. Owner: finance lead and company secretary.
3. Pull the KPIs from the source systems named in the dictionary. Owner: finance lead.
4. Review variances against the approved budget and write the investor note. Owner: CEO and finance lead.
5. Sign off the pack and the note together. Owner: CEO.
6. Issue to the register, with depth set by entitlement. Owner: finance lead.
7. Archive the pack, the note and any restatement. Owner: company secretary.

Common mistakes that cost founders time and money

Most reporting failures after a round come from building the MIS around the wrong source: the pitch deck instead of the SHA, a spreadsheet instead of the register of members, or a tool instead of a stable close. Five mistakes recur, and each one is cheaper to prevent in the first 90 days than to repair at the next diligence.

1. Pitch deck first. The deck metrics won the round, so they feel like the right ones. The correct approach is to start from the register and add deck metrics only where a clause or the lead investor asks for them.
2. Different numbers for different investors. This happens through ad hoc replies to individual questions. The correct approach is one pack, one version and one archive, with answers to individual questions added to the next pack.
3. First month treated as normal. Round costs, application money and restricted cash distort the pack if they share lines with operating items. The correct approach is separate lines from day one and a visible allotment clock under Section 42(6) of the Companies Act, 2013.
4. Cap table outside the close. It lives in a spreadsheet owned by the founder or legal, so mismatches with the register of members and the FIRMS Entity Master go unseen. A FEMA contravention can attract a penalty of up to three times the sum involved where the amount is quantifiable, or up to ₹2 lakh where it is not, plus up to ₹5,000 for every day a continuing contravention runs after the first day (Section 13(1), FEMA, 1999). The correct approach is a cap table tie out in every monthly close checklist.
5. Dashboard before the close is stable. A tool automates whatever the books say, including their errors. The correct approach is to stabilise the close and the dictionary first, then choose the tool. Investor update software earns its place after that, because it sends and archives the pack but does not decide what a number means.

What we see in Treelife MIS engagements

The failures that matter after a round are rarely arithmetic. They come from undefined contract terms, a close that finishes too late for the board calendar, and a cap table that sits outside the finance process. The note and the case below show how each one appears in live work.

FAQs on MIS setup after a funding round

Q: Are funds raised in the round treated as income in the MIS?
A: No. Share capital and securities premium are equity, not revenue, so they sit below the operating lines and in the cash and funding section of the pack. Premium above fair value was taxed under Section 56(2)(viib) of the Income-tax Act, 1961 until that provision ceased to apply from assessment year 2025-26 (Finance (No. 2) Act, 2024), and the Income-tax Act, 2025 carries no equivalent.

Q: Which tax lines should the investor MIS carry from FY 2026-27?
A: Carry the tax deducted and deposited line, referenced to the Income-tax Act, 2025. TDS on payments other than salary sits under Section 393 where the earlier of credit or payment falls on or after 01/04/2026. Where that date falls on or before 31/03/2026, the 1961 Act still applies, so a pack covering March and April 2026 should show both references.

Q: What does MIS setup after a funding round cost?
A: I do not have a fixed figure. The fee depends on the number of entities, source systems, investors on the register and the pack frequency. Scope the information rights register first, since it fixes the investor count and cadence. Fee drivers for outsourced packs are covered in monthly MIS reporting services.

Q: How long does MIS setup take?
A: About 90 days to the first live pack is a reasonable planning estimate. It can be shorter when the books are already clean and the SHA is simple. It runs longer when the cap table needs correction or the SHA has several side letters.

Q: How soon after closing should the first investor MIS go out?
A: By the date the SHA names. If the SHA is silent, agree a date in writing with the lead investor and record it in the board minutes. After the first pack, the monthly day follows the close calendar and the SHA. Board meeting cadence under Section 173(1) of the Companies Act, 2013 is a separate clock and does not set the MIS date. Delivery clocks for outsourced packs are covered in monthly MIS reporting services.

Q: Which documents are needed to start the setup?
A: The signed SHA, SSA and term sheet, any investor side letters, the allotment resolutions and return of allotment, the FC-GPR acknowledgement for foreign money, the current cap table, the approved budget and bank statements including the application money account. These let you build the register and the tie outs without chasing documents mid build.

Q: What changes when an investor is outside India?
A: The issue of equity instruments must be reported on FIRMS in Form FC-GPR within 30 days of issue (RBI Master Direction on Reporting under FEMA, 1999, updated 01/10/2026). Your cap table must match the Entity Master, and the pack should show foreign investment received separately from domestic. See the FC-GPR filing guide for the steps.

Q: Do cofounders and family holders receive the same pack as investors?
A: No. Contractual information rights belong to the investors named in the SHA. Cofounders in management see everything through their role. Other members receive the annual financial statements, which every member is entitled to under Section 136(1) of the Companies Act, 2013.

Q: Should the MIS track DPIIT recognition?
A: Yes, as a compliance line showing the recognition validity date and turnover against the ceiling. Under Notification G.S.R. 108(E) dated 04/02/2026, a regular startup keeps recognition for up to 10 years from incorporation and while turnover stays within ₹200 crore, and a deep tech startup for up to 20 years and ₹300 crore. The revised recognition framework explains the change from the 2019 notification.

Q: What happens to the MIS if an allotment or tranche does not complete?
A: The application money stays in the pack as a separate liability and restricted cash until allotment or refund. If allotment does not happen within 60 days of receipt, the money must be repaid within 15 days after that period (Section 42(6), Companies Act, 2013). Update the proceeds schedule and tell the lead investor the same day.

Q: What does a follow on investor read in the reporting history?
A: Consistency, restatements and forecast accuracy. They compare packs month to month for stable definitions, check how misses were explained, and test whether budget and actual converged over time. A clean archive shortens diligence. See investor due diligence readiness for what else they check.

Q: Do ESOP holders receive the MIS?
A: Not unless the scheme says so. ESOP holders appear in the pack through the fully diluted cap table and the pool utilisation line. Once options are exercised and shares allotted, the holder becomes a member with the statutory right to annual financial statements (Section 136(1), Companies Act, 2013).

Q: Can prospective investors receive the monthly update?
A: Only a shorter version. Send highlights without bank balances or unit economics, and check the confidentiality clause of the SHA before sharing anything drawn from the pack. Holders on the register keep their contractual entitlement. Prospects have none, so what they receive is a courtesy that can be withdrawn.

Q: Does an NRI founder’s allotment change the reporting?
A: It can. Residential status on the allotment date decides whether the issue is reported on FIRMS as an issue to a person resident outside India. Confirm status before allotment and record the basis in the closing file, so the cap table and the FIRMS entry agree.

Q: Can an investor demand monthly MIS when the SHA says quarterly?
A: Not as of right. A demand beyond the SHA or a side letter is a negotiation. Offer a short monthly flash using the same definitions, and keep the full pack on the contractual cycle. This protects the relationship without creating a new obligation.

Starting MIS setup for a newly funded startup this week

Start with the signed documents, not a tool. Build the information rights register, lock the KPI dictionary with the lead investor, tie the books to the cap table and FIRMS, and issue the first pack on the contractual date. MIS setup for a newly funded startup is complete when every investor on the register can reconcile your numbers without asking you to explain them.

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Regulatory references

• Companies Act, 2013: Section 42(4) (separate bank account for application money), Section 42(6) (allotment within 60 days, repayment within 15 days, 12 per cent interest), Section 42(8) (return of allotment within 15 days), Section 52 (application of securities premium), Section 88 (register of members), Section 128 (books of accounts), Section 129 (financial statements), Section 136(1) (right of members to financial statements), Section 173(1) (board meeting frequency), Section 173(3) (notice of board meetings)
• Companies (Prospectus and Allotment of Securities) Rules, 2014: Rule 14(6) (PAS-3 within 15 days), Rule 9B (dematerialisation by private companies other than small companies, half yearly Form PAS-6)
• Companies (Accounts) Rules, 2014: proviso to Rule 3(1) (accounting software with audit trail, from 01/04/2023)
• Secretarial Standard 1 on Meetings of the Board of Directors (Institute of Company Secretaries of India): clause 1.3.7 (agenda and notes on agenda)
• Foreign Exchange Management Act, 1999: Section 13(1) (penalty up to thrice the sum involved, or up to ₹2 lakh, plus up to ₹5,000 a day for continuing contravention)
• RBI Master Direction on Reporting under FEMA, 1999 (FED Master Direction No. 18/2015-16, updated 01/10/2026): advance reporting within 30 days of receipt, Form FC-GPR under the Single Master Form on FIRMS within 30 days of issue, annual FLA return by 15 July on FLAIR
• Income-tax Act, 2025 (in force from 01/04/2026): Section 393 (TDS on payments other than salary)