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Rights issue

Samiksha Angaria (12 Points)

30 April 2020

What is rights issueof shares under companies act,2013 ?

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Tanuj Gupta (14 Points)
Replied 30 April 2020

This shares are issued by company to those share holder who already holds equity in any ration as he may think fit at a price lower than market price

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Rinks Singh (82 Points)
Replied 02 May 2020

Not in any ratio, it should be equal to same ratio in which existing shareholder holds

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Tanuj Gupta (14 Points)
Replied 02 May 2020

Right shares issued in ratio as it may think by company and Board of directors.
for example
company have already issued 15,00,000 equity for face value rupees 10 each.
company want to issue right shares in the ratio of 2:15
it means who holds 15 shares get 2 right shares at price decided by company.

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Jatin Bajaj (CS) (2930 Points)
Replied 02 May 2020

As per the provisions of section 62(!)(a) of the Companies Act 2013, right issue means the issue of shares to the existing shareholders in proportion to the existing shareholding of the Company in consideration of application money.

First of all Company shall call up the Board meeting for draft offer letter.

offer letter shall be sent to the shareholder at least 3 days before the opening of issue.

offer shall remain open for minimum 15 days and shall remain open for maximum 30 days. but in case of private limited company if 90 percent of the shareholders give consent in writing, then offer can remain open for less than 15 days.

Accept the application money within the offer letter and allot the shares within 60 days of receipt of application money in order to avoid the non compliance.

within 30 days of allotment of shares, file form PAS 3 to ROC along with the following attcahments

Certified copy of Board resolution for approval of draft offer letter

list of allotees

certified copy of board resolution for allotment of shares

Further hold the board meeting if required for issue of share certificate of the Company and authorized one Director and authorized signatory who shall sign the share certificate and shall issue share certificate within 60 days of allotment of shares

pay stamp duty within 30 days of issue of share certificate as per the rate of stamp duty of the states

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