Abhigya Jain (1 Points)
17 April 2020
Harish choursiya
(Student cs professional )
(249 Points)
Replied 17 April 2020
As far as right issue is concerned as a matter of issuance of securities to existing members of the Companies is governed under section 62(1)(a) of Companies Act, 2013 read with relevant share capital rule
For this transaction
Here I am relying on following underlying assumption:
1.companies is PVT Ltd company
2.Companies is in under fully compliance with all the applicable laws
As mention in the query itself another company(holding company) hold more than half of the share capital of the Company (subsidiary Co.)
subsidiary Company proposed to issue right issue to existing members including holding company as member of subsidiary company.
Compliance on the part of the subsidiary company shall be performed like
1.Board of Directors approve right issue U/S 179(3)
2. issuance of letter of offer to all the member
3.Amend MOA If Authorised share capital is not sufficient follow section 13, 61.
4 . filing to ROC return of allotment
Conclusion - in this case No Board Resolution required on the part of Holding company to avail right issue. Right issue is the return or offer received on the basis of existing holding of share.
Another aspects if this acquisition is considered as investment of the funds of the Companies then in that case company (holding Co.) needs to approve this in Board meeting itself under section 179(3)(e).
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