Right Issue
{Section 62 (1) (a) of Companies Act, 2013}
1) A Company can issue equity shares to its existing shareholders in proportion to the paid-up capital of the Company by sending offer letter to them.
Letter of Offer shall contain:
a) Number of Shares offered to existing shareholders
b) Time shall be given to shareholders is minimum 15 days but maximum up to 30 days from the date of issue of letter offer
Notification Dated 05.06.15: In case of Private Company if 90% of shareholders give their consent in writing or in electronic mode then lesser time period shall apply.
c) Statement that shareholders have a right to renounce the shares offered to them in favor of any other person.
**A Company can add further points in Letter of Offer according to its requirement like object of issue, basis, face value, mode of payment, etc.
2) Notice shall be dispatched through registered post/speed post/ electronic mode atleast 3 days before opening of Issue.
3) After expiry of time period as specified in notice (if no shareholder has given his/ her assent or dissent received before expiry of time period as mentioned in the notice) then Director shall dispose of the application in such a way that it is not disadvantageous to any shareholder and the Company.
4) Form PAS-3 shall be filed within 30 days.(Board Resolution and List of Allotees shall be attached)
Preferential Allotment
{Section 62 (1) (c) of the Companies Act, 2013
Read with Rule 13 of the Companies (Share Capital and Debentures) Rules, 2014}
Preferential offer means issue of equity shares, fully or partly convertible debentures or any security which can be converted in equity shares to any person or group of person; whether that person includes in Section 62 (1) (a) or (b)
It Does not include: Shares issued through public issue, right issue, employee stock option scheme, employee stock purchase scheme, sweat equity shares, bonus shares, or depository receipts issued in country outside India.
Requirements while issuing shares through Preferential offer:
1. Must be authorised in articles of association, if not pass special resolution.
2. Must be authorised by passing special resolution and allotment shall be completed within 12 months from the date of passing special resolution, if such allotment is not made within such period then another special resolution is required to be passed.
3. Shares shall be made fully paid up at the time of allotment
4. Shares must be issued either for cash or for consideration other than cash and price of the shares shall be determined on the basis of valuation report of a registered valuer.
5. And such issue shall comply with the provisions of Section 42 of the Companies Act, 2013 read with Rule 14 of Companies (Prospectus and Allotment of Securities Rules, 2014)
6. In case of non cash consideration following treatment shall take place:
a) where it takes the form of depreciable asset, it shall be carried forward to the balance sheet in accordance with accounting standard
b) other than clause (a) it shall be expensed as provided in accounting standards.
Disclosure required to be made as per Rule 13 of Companies (Share Capital and Debentures) Rules, 2014 in the explanatory statement:-
(i) the objects of the issue
(ii) the total number of shares or other securities to be issued
(iii) the price at which the allotment is proposed
(iv) basis on which the price has been arrived at along with report of the registered valuer
(v) relevant date with reference to which the price has been arrived at
(vi) the class or classes of persons to whom the allotment is proposed to be made
(vii) intention of promoters, directors or key managerial personnel to subscribe to the offer
(viii) the proposed time within which the allotment shall be completed
(ix) the names of the proposed allottees and the percentage of post preferential offer capital that may be held by them
(x) change in control, if any, in the Company that would occur consequent to the preferential offer
(xi) number of persons to whom allotment on preferential basis have already been made during the year, in terms of number of securities as well as price
(xii) Justification for the allotment proposed to be made for consideration other than cash together with valuation report of the registered valuer
(xiii) Pre issue and post issue shareholding pattern of the Company are as follows :
| Sl.
No. |
Category | Pre Issue | Post Issue
|
||
| No. of Shares held
|
% of shareholding
|
No. of Shares held
|
% of shareholding
|
||
| 1 | Promoters’ holding: | ||||
| Indian : | |||||
| Individual | |||||
| Bodies Corporate | |||||
| Sub Total | |||||
| 2 | Foreign Promoters | ||||
| Sub Total (A) | |||||
| B | Non-Promoters holding : | ||||
| 1 | Institutional Investors | ||||
| 2 | Non- Institution : | ||||
| Private Corporate Bodies | |||||
| Directors and Relatives | |||||
| Indian Public | |||||
| Others (Including NRIs) | |||||
| Sub Total(B) | |||||
| Grand Total | |||||
Forms to be filed and their attachments:
Form PAS-3: Board Resolution, List of Allottees, Form PAS-5 & Valuation Report
Form MGT-14 (For EGM Notice): EGM Notice, Explanatory Statement and Extract
Issue of Bonus Shares
{Section 63 of Companies Act, 2013 with Rule 14 of Companies (Share Capital and Debentures Rules, 2014)}
1. Company may Issue fully paid up Bonus Shares to its members out of
a) Free Reserve, or
b) Securities Premium Account, or
c) Capital Redemption Reserve Account
Provided that Bonus Issue can’t be made out of Capitalization reserve created out of Revaluation of assets.
2. Company can Issue Fully paid up Bonus Shares through capitalization profit or reserve if:
a) Authorized in Articles.
b) On Recommendation of Board been authorized in general meeting,
c) Company has not defaulted in payment of interest of fixed deposits or debt securities
d) Not defaulted in payment of statutory dues of the employees
e) No existing partly-paid up shares on the date of allotment
f) Once announced, it can’t be revoked (Rule 14)
3. Bonus shares shall not be issued in lieu of dividend.
