CS Lily Bali

Lily Bali

Meaning of  Right Share of Issue: Right Issue’ means offering shares to existing members in proportion to their existing shareholding  through letter of offer.

Governing Section: SECTION 62  of Companies Act 2013

STEP Procedure for RIGHT ISSUE OF SHARES

STEPS INVOLVEDFOR PRIVATE COMPANY FOR PUBLIC COMPANY
Step  1Issue the notice of Board Meeting At least 7 days before the meeting as per  section 179-(3)Issue the notice of Board Meeting At least 7 days before the meeting as per  section 179-(3)
Step 2Hold the Board meeting as Per SS 1   pass the board resolution  for approval of draft letter  of offerHold the Board meeting as Per SS 1 and SS 2 and  pass the board resolution  for approval of draft letter  of offer
Step -3Dispatch Letter of offer through registered post or speed post or through electronic mode to all the existing share holders. –Dispatch Letter of offer through registered post or speed post or through electronic mode to all the existing shareholders. –
Step -4As per  Section 62 (2)Letter of Offer must be sent at least 3 day before the opening of issue but Notification dated 05.06.2015 

Says notice can be sent even lesser than three days before the issue opens, if 90% of the members agree in writing (consent can be even by electronic mode).

Time period of  Open of subscription: As per section 61 (1) (a)

The offer shall remain open for subscription for minimum 15 days and maximum 30 days but Notification date 05.06.2015 says

if 90% of the members agree in writing (consent can given by electronic mode) then the offer can be kept open for lesser than 15 days.

As per section 62 (2) Letter of Offer must be sent at least 3 day before the opening of issue

Time period of  Open of subscription: As Per 61 (1) (a)

The offer shall remain open for subscription for minimum 15 days and maximum 30 days

Step 5 NOT APPLICABLEFile MGT-14 within a 30days from date of passing Board Resolution.

Attachment : CTC-of Board Resolution  for issue of Letter of Offer.

Step  6 Receive Application Money

Note : In Right Issue application of money through CASH is Allowed

Receive Application Money

Note : In Right Issue application of money through CASH is Allowed

Step -7Call Second Board Meeting after received application money

1.Issue Notice Of Board Meeting at least 7 days before the date of Board Meeting As per section- 173 (3), attach Agenda and notes along with Notice

HOLD BOARD MEETING: As Per SS1, Represent the list of Allottee  and Pass the Board Resolution for Allotment of Shares

Call Second Board Meeting after received application money

1.Issue Notice Of Board Meeting at least 7 days before the date of Board Meeting As per section- 173 (3), attach Agenda and notes along with Notice

HOLD BOARD MEETING: As Per SS1, Represent the list of Allottee  and Pass the Board Resolution for Allotment of Shares

Step -8 File PAS-3 within a 30days from the date of Allotment.

Attachment :

1.CTC of Board Resolution for Allotment of Shares

2. List of Allottee

 File PAS-3 within a 30days from the date of Allotment.

Attachment :

1.CTC of Board Resolution for Allotment of Shares

2. List of Allottee

Step 9Issue Share Certificate

Within 2 Month From date of Allotment

Authorise Two Director along with One Authorizes representative to Sign Share Certificate and Issue Share Certificate in SH-1

Issue Share Certificate

Within 2 Month From date of Allotment Authorise Two Director along with One Authorizes representative to Sign Share Certificate and Issue Share  Certificate in SH-1

Step 10GET the Share stamp  from SDM Department within a 30days from date of ISSUEGET the Share stamp  from SDM Department within a 30days from date of ISSUE

For Board Resolution formats Contact on below mentioned details

(Author  is a Company Secretary  from Delhi/NCR and can be contacted at  cslilybali@yahoo.com, Contact Number : 9711772751)

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