Increase in Paid-up capital- Right Issue- Shares to existing Shareholder

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As per Section 62 of the Companies Act, 2013, a Company can further issue its share by way of Right issue, Private placement, and Preferential Allotment.

The simplest method with minimum compliance requirement is the right issue through which company can increase its Subscribes capital

The right issue means Issue of Share by the Company where Shares are offered to the Existing shareholders first, Shareholders have an option to accept and reject the offered shares.
Shareholder also can renounce the right in favor of other shareholders.


Step 1–Issue a Notice of Board meeting at least 7 days before the board meeting as per the provisions of section 173 of the Companies Act, 2013.

Step-2 Hold a Board meeting and pass a Board resolution for approval of the offer letter and Right Issue.

Step-3 Send the letter of offer of shares to all the existing shareholders.

Step-4 File MGT-14 with the registrar of the Company within 30 days of passing of the above-mentioned Board resolution.

Step-5 Hold the Board meeting after the receipt of application Money from Shareholders, who have accepted the offer.

Step-6 Pass the Board resolution for the Allotment of Shares.

Step-7 File Form Pas-3 with the Registrar of Companies within 30 days of passing of the resolution.

Step-8   Issue Share Certificates to the Shareholders.

Points to be kept at the time of right issue

  1. Decide the cutoff date.
  2. An offer should be open at least 3 days of the issue of offer letter.
  3. The offer Period shall be open for a minimum of 15 days and a maximum of 30 days.
  4. An Offer shall be made by notice specifying the number of shares offered and limiting a time. 

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