PROCEDURE FOR RIGHT ISSUE OF SHARES UNDER COMPANIES ACT, 2013

PROCEDURE FOR RIGHT ISSUE OF SHARES UNDER COMPANIES ACT, 2013 PROCEDURE FOR RIGHT ISSUE OF SHARES Meaning of Right Share of Issue: Right Issue means offering shares to existing members in proportion to their existing shareholding through letter of offer. When the rights are for equity securities, such as shares, in a public company, it is a non-dilutive pro rata way to raise capital. Governing Section : SECTION 62 of Companies Act 2013 STEP Procedure for RIGHT ISSUE OF SHARES

STEPS INVOLVED	FOR PRIVATE COMPANY	FOR PUBLIC COMPANY
Step 1	Issue the notice of Board Meeting At least 7 days before the meeting as per section 173 (3)	Issue the notice of Board Meeting At least 7 days before the meeting as per section 173-(3)
Step 2	Hold the Board meeting as Per SS 1 pass the board resolution for approval of draft letter of offer	Hold the Board meeting as Per SS 1 and SS 2 and pass the board resolution for approval of draft letter of offer
Step -3	Dispatch 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 -4	As 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 APPLICABLE	File 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 -7	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	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 9	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	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 10	GET the Share stamp from SDM Department within a 30days from date of ISSUE	GET the Share stamp from SDM Department within a 30days from date of ISSUE

For Board Resolution formats Contact on below mentioned details Author CS Lily Bali ,ACS is a Company Secretary from Delhi/NCR and can be contacted at [email protected], Contact Number : 9711772751 RIGHT ISSUE OF SHARES UNDER COMPANIES ACT, 2013,PROCEDURE FOR RIGHT ISSUE OF SHARES, RIGHT ISSUE OF SHARES