Rights Issue Of Shares

Excersing The Rights. Ensuring Fair Distribution.

     

    A Company can propose to raise additional share capital by issuing of shares, offering shares to existing members in proportion to their existing share holding. The objective is to ensure equitable distribution of Shares and the proportion of voting rights is not affected by issues of Fresh shares.
    The existing shareholder being issued right shares have the alternative to transfer their right to a different person or to be waived or modified. Once they exercise their right, it cannot be modifed unless the Board passes a resolution.

    Prerequisites

    • Offer for the issue of right shares
    • Issue of such shares with sure documentation
    • Filing such an issue with the ROC
    • Issue of share certificates to right shareholders

    Procedure

    01

    Call Board Meeting to pass a Resolution for the offer of right shares, its price, the number of shares to be issued, the offer date, closing date and other information.

    02

    Sending an offer letter to shareholders and collect their application.

    03

    Collecting such applications in the offer period and create a list of the proposed allottees.

    04

    Issue of right shares.

    05

    Call a Board meeting for the issue of shares to pass a resolution to issue such shares to eligible applicants.

    06

    File the Return of Allotment with the MCA and the ROC in PAS 3.

    07

    Issue share certificates for such shares.

    08

    Make the necessary entries in the register of members.

    Documentation

    An application signed by the shareholders or renouncer with renunciation of such application.
    List of Documents

    • Application for Issue of Right shares
    • Copy of PAN Card

    Rights Issue – Realised For You

    Be eformed!