{"id":450,"date":"2019-04-09T07:41:53","date_gmt":"2019-04-09T07:41:53","guid":{"rendered":"https:\/\/rta.saginfotech.com\/blog\/?p=450"},"modified":"2022-03-30T12:29:45","modified_gmt":"2022-03-30T12:29:45","slug":"procedure-right-issue-of-shares","status":"publish","type":"post","link":"https:\/\/rta.saginfotech.com\/blog\/procedure-right-issue-of-shares\/","title":{"rendered":"Complete Procedure For Right Issue of Shares Under Companies Act: 2013"},"content":{"rendered":"\n

Meaning of Right Issue of Shares: <\/strong><\/h2>\n\n\n\n

‘Right Issue\u2019<\/strong> refers to the act of offering shares to the existing members of the company in proportion to their current shareholding via a letter of offer.<\/p>\n\n\n\n

Governing Section<\/strong>: <\/h3>\n\n\n\n

SECTION 62 of Companies Act 2013<\/p>\n\n\n\n

The Provisions of Section 62 of the Companies Act, 2013 bind all Private companies, public companies, listed and unlisted companies.<\/p>\n\n\n\n

Step by Step Procedure for Right Issue of Shares:<\/strong><\/h2>\n\n\n\n
\n\t\t\t\n\t\t\tSTEPS\n\t\t\tINVOLVED<\/strong>\n\t\t<\/td>\n\t\t\t\n\t\t\tFOR\n\t\t\tPRIVATE COMPANY<\/strong>\n\t\t<\/td>\n\t\t\t\n\t\t\tFOR\n\t\t\tPUBLIC COMPANY<\/strong>\n\t\t<\/td><\/tr>
\n\t\t\t\n\t\t\tStep\n\t\t\t 1<\/strong>\n\t\t<\/td>\n\t\t\t\n\t\t\tIssuance\n\t\t\tof the notice of Board Meeting at least 7 days prior the meeting\n\t\t\tas per the norms of section 179-(3)\n\t\t<\/td>\n\t\t\t\n\t\t\tIssuance\n\t\t\tof the notice of Board Meeting at least 7 days prior the meeting\n\t\t\tas per the norms of section 179-(3)\n\t\t<\/td><\/tr>
\n\t\t\t\n\t\t\tStep\n\t\t\t2<\/strong>\n\t\t<\/td>\n\t\t\t\n\t\t\tSummon\n\t\t\tthe Board meeting as Per SS 1 to pass a board resolution for\n\t\t\tapproving \u201cLetter of offer\u201d which should encompass right of\n\t\t\trenunciation also.\n\t\t<\/td>\n\t\t\t\n\t\t\tSummon\n\t\t\tthe Board meeting as Per SS 1 to pass a board \n\t\t\tapproving \u201cLetter of offer\u201d which should encompass right of\n\t\t\trenunciation also.\n\t\t\t\n\t\t\t
\n\t\t\t\n\t\t<\/td><\/tr>
Step 3<\/strong> <\/td>\n\t\t\t\n\t\t\tSend\n\t\t\tthe Letter of offer to all the existing shareholders via\n\t\t\tregistered post or speed post or electronic mode\n\t\t<\/td>\n\t\t\t\n\t\t\tSend\n\t\t\tthe Letter of offer to all the existing shareholders via\n\t\t\tregistered\n\t\t\tpost or speed post or through electronic mode \n\t\t\t\n\t\t<\/td><\/tr>
Step 4<\/strong> <\/td> Section 62 (2) states that the Letter of Offer must be posted at least 3 days earlier then the date of opening of issue but after Notification dated 05.06.2015 <\/strong> Condition given that notice can be sent even lesser than three days before the issue opens, when 90% of the members give their consent in writing ( even by electronic mode).

Time period of Open of subscription: As per section 61 (1) (a)<\/strong> The offer shall remain valid for the subscription for at least 15 days and at most 30 days but Notification date 05.06.2015 approves the offers to be kept open for less than 15 days when 90% of the members give consent in writing (even by electronic mode) . <\/td>		Section 62 (2) states that the Letter of Offer must be posted at least 3 days earlier then the date of opening of issue.

Time period of subscription: As Per 61 (1) (a)The offer shall remain valid for the subscription for at least 15 days and at most 30 days <\/td><\/tr>
\n\t\t\t\n\t\t\tStep\n\t\t\t5<\/strong>\n\t\t<\/td>\n\t\t\t\n\t\t\tNOT\n\t\t\tAPPLICABLE\n\t\t<\/td> File MGT-1 in a period of 30 days from the date of passing Board Resolution.

Attachment: CTC-of Board Resolution for the issue of Letter of Offer. <\/td><\/tr>
\n\t\t\t\n\t\t\tStep\n\t\t\t 6<\/strong>\n\t\t<\/td>Accept Application Money ( cash money is permitted here)
<\/td>		 Accept Application Money (cash money is permitted here) <\/td><\/tr>
Step 7<\/strong> <\/td>Convene the Second Board Meeting after receiving application money

1. Send Notice Of Board Meeting minimum 7 days before the date of Board Meeting As per section- 173 (3), attest Agenda and notes with Notice

CONVENE BOARD MEETING: As Per SS1, Show the list of Allottee and Pass the Board Resolution for Allotment of Shares <\/td>		Convene the Second Board Meeting after receiving application money

1. Send Notice Of Board Meeting minimum 7 days before the date of Board Meeting As per section- 173 (3), attest Agenda and notes with Notice

CONVENE OR HOLD BOARD MEETING: As Per SS1, Show the list of Allottee and Pass the Board Resolution for Allotment of Shares <\/td><\/tr>
Step 8<\/strong> <\/td> File PAS-3 within a 30 days period from the date of Allotment coupled with CTC of Board Resolution for Allotment of Shares and List of Allottee. <\/td>\n\t\t\t\n\t\t\t File\n\t\t\tPAS-3 within a 30 days period from the date of Allotment coupled\n\t\t\twith CTC\n\t\t\tof Board Resolution for Allotment of Shares and List of Allottee.\n\t\t<\/td><\/tr>
\n\t\t\t\n\t\t\tStep\n\t\t\t9<\/strong>\n\t\t<\/td>Issue Share Certificate

In the period of 2 Month From date of Allotment

Empower two Directors in addition to One Authorized representative to Sign Share and Issue Share Certificate in SH-1 <\/td>		 Issue Share Certificate

In the period of 2 months From date ofAllotment

Empower two Directors in addition to One Authorized representative to Sign Share and Issue Share Certificate in SH-1
<\/td><\/tr>
\n\t\t\t\n\t\t\tStep\n\t\t\t10<\/strong>\n\t\t<\/td>\n\t\t\t\n\t\t\tObtain\n\t\t\tthe Share stamp from SDM Department within a period of 30 days\n\t\t\tfrom date of ISSUE\n\t\t<\/td>\n\t\t\t\n\t\t\tObtain\n\t\t\tthe Share stamp from SDM Department within a period 30 days from\n\t\t\tdate of ISSUE\n\t\t\t\n\t\t\t
\n\t\t\t\n\t\t<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Read Also: <\/em><\/strong>Complete Procedure for Bonus Issue of Shares by Companies<\/em><\/strong><\/a><\/p><\/blockquote>\n\n\n\n

\n

Dedicated SAG RTA Team to Handle Client Transactions and Queries <\/h2>\n

Appoint SAG RTA as Your RTA Service Provider Now<\/p>\nAppoint RTA Agent Now<\/a>\n<\/div>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Meaning of Right Issue of Shares: ‘Right Issue\u2019 refers to the act of offering shares to the existing members of the company in proportion to their current shareholding via a letter of offer. Governing Section: SECTION 62 of Companies Act 2013 The Provisions of Section 62 of the Companies Act, 2013 bind all Private companies, […]<\/p>\n","protected":false},"author":1,"featured_media":456,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"yoast_head":"\nComplete Procedure For Right Issue of Shares Companies Act: 2013<\/title>\n<meta name=\"description\" content=\"Check the complete step by step procedure for Right issue of shares of public & private company. 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