Incresing fund by issue of shares to exisitig shareholders

Save Share

Join Us Follow Us Add as Source

This query is : Resolved

Report Query Ask a Query

anjana arora

anjana arora (Querist)

21 April 2015 we want to increase fund by issue of shares to existing shareholders.

what is the procedure

CA LOKESH KASAT, FCA, M.Com

CA LOKESH KASAT, FCA, M.Com (Expert)

27 April 2015 When shares are offered to the existing shareholders, it is called the Right issue and shares if taken are known as Right Share.
Procedure for Right Issue:
 Company will provide Right in proportion, to the paid-up share capital and send letter of offer.
 offer shall be made by notice specifying the number of shares offered
 Time to reply will be minimum 15 days and maximum can be 30 days
If not accepted offer shall be deemed to have been declined
 Offeree (i.e. Existing Shareholder) can re-announce the right in favor of other person, unless Articles restricts.
 If existing shareholder doesn’t show interest than company can issue further shares to Public.
The notice of offer of shares shall be dispatched through registered post or speed post or through electronic mode to all the existing shareholders at least 3 days before the opening of the issue.

anjana arora

anjana arora (Querist)

29 April 2015 thanks for reply
if company increase its authorized capital what effect it has on income tax

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now