Structured Biiz

FURTHER ISSUE OF SHARES

Issue of Shares on Rights Issue basis

Issue of shares on Rights Issue basis is one of the ways of increasing the Paid up Share Capital of the Company.

In case of Rights Issue of shares, the Company issues additional shares to the existing shareholders in the proportion to their current shareholding.

Rights issue ensures equitable distribution of shares among the existing shareholders of the Company in the proportion of their voting rights.

Rights issue process can be availed by Private Limited Company, Public Limited Company, Listed Company or Unlisted Company. In order to retain the ownership, Private limited Company resorts to raising of capital from their existing Shareholders of the Company through rights issue process.

While making an offer under the Rights Issue, the shares are offered to all the existing shareholders of the Company. The shareholders get the right of Renunciation, in case they do not intend to accept the rights issue offer or do not intend to invest further capital in the Company.

Firstly, the Company needs to check its Authorised Share Capital of the Company in order to accommodate the new issuance of shares on Rights Issue basis. Also, the Board of Directors of the Company must be authorised by the Articles of Association to issue shares on Rights Issue basis.Rights Issue is governed by section 62 of the Companies Act 2013. Synopsis of the procedure followed for issue of shares on Rights Issue basis is as follows:

When a Company demands Capital infusion, Rights Issue Process is the most convenient form of fundraising resorted by the existing shareholders of the Company.

Issue of Shares on Preferential Issue basis

A Preferential Issue is an issuance of shares or securities by Private Limited Company, Public Limited Company, Listed or Unlisted Companies to a selected group of Shareholders who are not the existing Shareholders of the Company. Preferential issue and allotment process is followed when the Company intends to issue shares:

It is another fastest way to infuse Capital in the Company. It is one of the mediums used by the investors to infuse Capital in the Start-up Companies. Investors are generally issued and allotted either Equity or Convertible Preference Shares, Convertible Debentures on preferential basis.

Preference issuance and allotment is governed by section 62 and section 42 of the Companies Act 2013 along with the rules as prescribed there under. Synopsis of the procedure followed for issue and allotment of shares on preferential basis is as follows:

Please note the procedure described above is a brief synopsis of the steps followed at the time of issuance and allotment of Shares / Securities on Rights Issue Basis / Preferential Issue Basis. 
Much more detailed process is followed while execution of the transaction. 
These details are jotted down strictly for giving a brief information about the process followed. 

Further Issue of Shares

All inclusive

*The fee mentioned above is not an inclusive fee. Govt. Fees, Stamp Duty Payment or late Penalty Fee or any out of pocket expenses arising in the matter shall be charged separately.