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issue of shares.

Gaurav Kaushik (Assistant C.S.) (66 Points)

06 November 2017

If a private company wants to allot equity shares to only 3 out of 6 members then it comes under which issue i.e. private placement or right issue or any other. please explain in detail.

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4 Replies

Rishab Walia (130 Points)
Replied 06 November 2017

If they want to give shares to their existing shareholders then it is known as "Right Issue".

Or if they want to give shares to other outsiders then they can use "Private Placement".

Madhwesh K (272 Points)
Replied 06 November 2017

dear Gaurav.. in addition to comment already made pls take note of mine as under 👇

Madhwesh K (272 Points)
Replied 06 November 2017

in your case since it is issue of shares, it can be structured as rights issue too .. ie., u can first make offer to all 6 members and then 3 accepts it and other 3 renounces their part to the first 3... by that way the first 3 can take up the intended shares.. this involves a bit of Excel sheet working..

otherwise, it can very well be structured as private placement too.. but compliances are much more than a simple rights issue..