|
Sr. No |
Basis of Difference |
Right Issue |
Private Issue |
Preferential Allotment |
|
1 |
Applicable provisions under Companies Act, 2013 |
Section 62(1)(a) read with Rules |
Section 42 read with rule 14 Companies (Prospectus and allotment of securities) Rules,2014 |
Section 62(1)(c ) read with rules 13 of Companies (share Capital and debentures)Rules,2014 and Section 42 read with rule 14 Companies (Prospectus and allotment of securities) Rules,2014 |
|
2 |
Type of Security |
Only Shares can issue. (Equity and Preference) |
Any security can issue. (Equity, Preference Debenture etc.) |
Only shares can issue (Equity and Preference) |
|
3 |
Eligible for Offer |
Issue of shares to existing Equity shareholder in proportion to their existing shareholding |
Offer of shares to Investors or any selected group of person or any outsider (other than by way of public offer) Invitation in one go max- 50 Persons Max during year- 200 persons |
Issue of shares to Both Existing Shareholders and/or outsiders. |
|
4 |
Approval Required |
Approval of Board of Director through Board Resolution required. |
Board & Shareholder approval *(General Meeting) |
Board & Shareholder approval *(General Meeting) |
|
5 |
Offer period |
Minimum Period-15 days Maximum Period - 30 days (however in case of private company if consent from 90% of the shareholder then the offer period can be less then as defined above) * Add 3 additional days extra for dispatch |
No specific minimum offer period defined under this section. However, maxium period of offer can be 365 days. |
No specific minimum offer period defined under this section. However, maxium period of offer can be 365 days. |
|
6 |
Format of offer Letter |
No specific format |
PAS-4(offer Letter) PAS-5(Complete record) |
PAS-4(offer Letter) PAS-5(Complete record) *No such Format in case of offer only to existing members. |
|
7 |
Forms to be filled |
1.PAS-3 (with in 30 days from allotment) PAS-3 needs to file with in 30 days of passing of board resolution for allotment of shares. |
1. MGT-14 (with in 30 days passing of special resolution in general meeting) 2. PAS-3(with in 15 days of allotment of shares) |
1. MGT-14 (with in 30 days passing of special resolution in general meeting) 2. PAS-3(with in 15 days of allotment of shares) |
|
8 |
Time period for allotment of securities *otherwise it will be treated as deposit |
Within 60 days for the Date of Receipt of Application Money. |
Within 60 days for the Date of Receipt of Application Money. |
Within 60 days for the Date of Receipt of Application Money. |
|
9 |
Separate Bank Account |
No Separate Bank Account Required |
Separate Bank account Required |
Separate Bank account Required |
|
10 |
Fund utilization |
Fund can be utilize any time after receipt of same |
Fund can’t be utilize only after filing of PAS-3. |
Fund can’t be utilize only after filing of PAS-3. |
|
11 |
Valuation Report |
Valuation Report is not Mandatory, *Valuation report is mandatory only in case of issue to non- existing non-resident shareholder |
Valuation Report is not Mandatory |
Valuation Report is Mandatory. |
|
12 |
Renounce the offer letter option |
Shareholders have rights to Renounce/accept/reject the offer letter *Subject to authorization in AOA |
No such right available |
No such right available |
|
13 |
Explanatory Statement |
Not applicable because no shareholder approval is required |
Notice should contain Explanatory statement as per rule 14(2) of Companies (Prospectus and allotment of securities) Rules,2014 |
Notice should contain Explanatory statement according to rule 13(d) of Companies (share Capital and debentures) Rules, 2014 read with rule 14(2) of Companies (Prospectus and allotment of securities) Rules,2014 |
|
14 |
Minimum Subscription or Investment size |
No such minimum subscription required |
No such minimum subscription required |
No such minimum subscription required |
|
15 |
Mode of Receipt of Subscription money |
Subscription money can be receive in cash or through Banking Channel |
Subscription money can be receive only through Banking Channel |
Subscription money can be receive in cash or through Banking Channel |
|
16 |
Debenture issue |
Debenture can't be issued through right issue of shares |
Debenture can be issued through right issue of shares |
Debenture can't be issued through this method |
|
17 |
Non Convertible Preference Shares |
Can't be issued through right issue of shares |
Can be issued through right issue of shares |
Can't be issued through this method |
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