Right Issue
Right Issue
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OVERVIEW
As per Section 62(1) of the Companies Act, 2013 if the Company decides to issue new shares, these should be offered to existing shareholders in proportion to existing persons who are holders of equity shares.
‘Right Issue’ is defined as giving shares to existing members in proportion to their existing shareholding. The goal isto enable equitable distribution of Shares so that the proportion of voting rights is not affected by the issue of Fresh shares.
Everyone knows that only one pre-emptive offer is to be made, which may be either accepted or rejected. The existing shareholders are not to be given further pre-emptive rights in respect of the unaccepted shares. Such right can at first be waived off or modified
DOCUMENTS REQUIRED FOR RIGHT ISSUE
Pan Card
Self-attested copy of PAN (mandatory)
Voter Id
Self-attested copy of Voter ID/Driving License/Passport
Passport Size photo
Passport Size photograph
Address Proof
Copy of address proof, i.e. bank statement with transaction/ mobile bill/ electricity bill/ telephone bill (not older than two months)
PROCEDURE FOR RIGHT ISSUE
 | Call a Board meeting by issue notice of meeting. |
| Approve right issue including “letter of offer”, which shall include right of renunciation also. |
| Send offer letter to all existing members as on the date of offer.(Through registered post or speed post or through electronic mode to all the existing share -holders at least three days before the opening of the issue) |
| Receive acceptance/ renunciations/rejection of rights from members to whom offer has been sent & also from persons in whose favour right renounced. |
| Call a Board meeting by issue of notice. |
| Approve allotment by passing of Board Resolution. |
| Issue of share certificates. |
| Authorize two directors and one more person for signature on Share Certificates. |
| Attach list of allottees in form PAS-3 mentioning Name, Address, occupation if any and number of securities allotted to each of the allottees and the list shall be certified by the signatory of the form pas-3. |
| Authorize a director to file E-form PAS 3(Return of Allotment) to ROC within 30 days of passing of Resolution. |
| Authorize a director to file E-form MGT 14 for issue of share certificate within 30 days of passing of Resolution. |
| File E-form MGT 14 for issue of share & PAS 3 to ROC for allotment. |
| Issue share certificate. |
| Make Allotment within 60 days of receiving of Application Money; otherwise it will treat as deposits as per deposits rules. |