Kaagazaat

Term Sheet for Investment

At a glance

Price: Free, always.
Stamp duty: Stamp duty depends on what the paper does and on the Schedule to the Indian Stamp Act, 1899 as applied in Punjab and in Chandigarh.
Registration: Not compulsorily registrable unless it creates or transfers a right in immovable property (section 17, Registration Act, 1908); this paper is not meant to.
Witnesses: Not required by law, but two adult witnesses who are not parties, each writing name, address and ID reference beside the signature, make a later denial harder.

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Also called

investment term sheet
startup funding term sheet
equity investment terms
letter of intent for investment
angel investment term sheet
seed round terms
investor term sheet
nivesh sharten

When you need it

A founder or company in Punjab or Chandigarh and an investor (an angel, a friend, a family office, a fund) have agreed in principle that the investor will put money into the company, and want the main terms on paper before spending time and money on the long agreements. A term sheet records the amount, the kind of shares, the valuation, what the money is for, the investor's rights, what the founders commit to, and the conditions to be met.

Most of a term sheet is deliberately not binding, so that neither side is forced into a deal before checks are done. A few parts are binding: confidentiality, a short period when the company will not negotiate with others (exclusivity), who bears costs, and the governing law. The document says which is which. The final share subscription agreement and shareholders' agreement will contain the real, binding terms. Not for a loan to the company (use the Loan Agreement for a director's or relative's loan, or a loan agreement). Not for the final agreements: use the Share Subscription Agreement and the Shareholders' Agreement. Not for an offer to the public.

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You can fill this one in on this site, and read the whole draft on screen before you decide anything about it. It is a carefully drafted template; it is not advice about your own facts.

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See stamp duty, registration and witnesses

What follows is written for Punjab and Chandigarh. It states the position there rather than describing how it varies, so the amounts below are the ones that apply — worth confirming at the sub-registrar’s office, because rates change. If the property is anywhere else in India, none of this is yours.

Stamp duty

Stamp duty depends on what the paper does and on the Schedule to the Indian Stamp Act, 1899 as applied in Punjab and in Chandigarh. An agreement of this kind is usually charged as an agreement not otherwise provided for, at a modest fixed figure, but the figure is not stated here: confirm it on the official e-stamping portal or with the Sub-Registrar before buying the stamp. If a clause makes the paper in substance something else (a transfer of property, a lease, a power of attorney, a guarantee), it is charged as that. An under-stamped paper cannot be used as evidence until the deficit and penalty are paid.

Registration

Not compulsorily registrable unless it creates or transfers a right in immovable property (section 17, Registration Act, 1908); this paper is not meant to. Registration is optional if the parties want it.

Notarisation

Not required by law, and not a substitute for stamping. A notary only records that the signatories appeared and signed, which makes it harder to deny a signature later. Carry original photo ID.

Witnesses

Not required by law, but two adult witnesses who are not parties, each writing name, address and ID reference beside the signature, make a later denial harder.

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Sample preview — placeholder answers, not your data

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TERM SHEET FOR INVESTMENT

Dated 2 April 2026, at Chandigarh.

Between Sandhu Foodtech Private Limited (CIN U15100CH2023PTC045678) of Plot 5, Rajiv Gandhi Chandigarh Technology Park, Chandigarh 160101 (the "Company"), its founders Harleen Sandhu (55%) and Karan Bedi (45%). (the "Founders"), and Anand Mehra of House No. 22, Sector 10, Panchkula 134109 (the "Investor").

PURPOSE. This term sheet sets out the main terms on which the Investor proposes to invest in the Company. Except for the binding terms in Part C, it is a statement of intention and creates no obligation to invest or to accept the investment. Final agreements will be drawn up if the checks in Part B are satisfied.

PART A: THE PROPOSED TERMS (not binding)

1. Amount and form. The Investor will invest ₹50,00,000 (Rupees Fifty Lakh only) in equity shares of the company, in one payment on closing.

2. Valuation. The Company is valued at ₹2,00,00,000 (Rupees Two Crore only) before the investment. The Investor's share of the Company after the investment is therefore the amount invested divided by the value before the investment plus the amount invested, calculated on a fully diluted basis (counting all shares and any options reserved).

3. Use of funds. The money will be used for: Equipment for a second production line, hiring of a sales team, and working capital. It will not be used to repay founders' loans or pay them beyond agreed salaries without the Investor's written consent.

4. Board. The Investor will have the right to appoint one director to the board.

5. Consent matters. These decisions will need the Investor's written consent: Issuing new shares, changing the Articles, borrowing above Rs 25 lakh, selling the business, paying founders more than the agreed salaries. If this is blank, no decisions are reserved to the Investor.

6. Information and pre-emption. The Company will give the Investor annual audited accounts, quarterly management figures and reasonable access to its records, and the Investor may take its share of any later issue of shares so as to keep its percentage.

7. Founders. The Founders will work full time for the Company. Their shares will vest over 4 years from closing (nil meaning no vesting), so that a Founder who leaves early keeps only the vested part. They will not run a competing business while they hold shares.

PART B: CONDITIONS (not binding)

8. The Investor's investment is subject to: Satisfactory legal, financial and tax due diligence; board and shareholder approvals; the valuation report and filings the law requires; signing the final agreements. If the investment has not closed by 1 April 2026, either side may end the discussions by written notice and neither is liable to the other except under Part C.

PART C: BINDING TERMS

9. Exclusivity. For 45 days from the date above, the Company and the Founders shall not offer shares or seek investment from, or negotiate with, any other person, and shall tell the Investor of any approach.

Questions about this document

Does the Term Sheet for Investment need stamp paper or stamp duty in Punjab and Chandigarh?

Stamp duty depends on what the paper does and on the Schedule to the Indian Stamp Act, 1899 as applied in Punjab and in Chandigarh.

See the full position on stamp duty, registration and witnesses

Does the Term Sheet for Investment need registration in Punjab and Chandigarh?

Not compulsorily registrable unless it creates or transfers a right in immovable property (section 17, Registration Act, 1908); this paper is not meant to.

See the full position on stamp duty, registration and witnesses

What does the Term Sheet for Investment cost on Kaagazaat?

Free, always.

Does the Term Sheet for Investment need witnesses?

Not required by law, but two adult witnesses who are not parties, each writing name, address and ID reference beside the signature, make a later denial harder.

See the full position on stamp duty, registration and witnesses

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