Rights Issue - Pvt ltd co

Private company can not issue the Right shares.

for more See Section 81(3)(a).

Ankur Shah (Practicing Company Secretary)

“Guru Gautam” Bungalow, Inside Parshwa Tower,

Nr. Shyamal Cross Road, 132ft. Ring Road,

Satellite, Ahmedabad – 15

Contact: + 91-9427633901

E-mail: ankurjewel @ gmail.com

Blog: csankur.blogspot.com

Dear Sir,

Thank you for the reply. But i have a query. Section 81 deals with furhter issue of capital and the provisions of the same does not apply to a private ltd co as mentioned in ur reply. But does it imply that just because the provisions of Section 81 does not apply to pvt ltd co, such companies are barred from rights issue ?? or is it like a pvt lts co need not undergo the provisions mentioned in sec 81 for rights issue.

Regards

Sreenidhi S

disagree with the above statement.

right issue simply means issue of shares to the existing shareholders.

a pvt company can also issue shares to its existing shareholders by allotment on BM. Filing of form-2 is necessary within 30 days of allotment in BM

Dear Sir,

Thank you for the reply. In a rights issue can all the shareholders renounce their right on the shares issued to them to one single person? Is it possible ?

I also agree with Mr. Garg's Reply.

But I would like to say that New shares can not be issued in the name of "Right Share"

The Private company can issue shares for N no. of times.

But It can not issue shares under the name of "Right Shares"

So, There is no point of Right of Renunciation.

However, Answer to your Question will be as follows:

Shareholder can renounce their right to single shareholder.

Ankur Shah (Practicing Company Secretary)

“Guru Gautam” Bungalow, Inside Parshwa Tower,

Nr. Shyamal Cross Road, 132ft. Ring Road,

Satellite, Ahmedabad – 15

Contact: + 91-9427633901

E-mail: ankurjewel @ gmail.com

Blog: csankur.blogspot.com

Thank you sir. But i was jus browsing through ythe net to find articles related for my query. Ifound this link

https://www.legalserviceindia.com/company%20law/com.htm

Under the head Private COmpanies please check point 3.

"Restriction contained in Section 81 related to the rights issues of share capital does not apply. A special resolution to issue shares to non-members is not required in case of a private company."

based on pure academic interest i would like to know why a pvt ltd co cannot issue shares on right basis ?

Regards

S.Sreenidhi

Check the Following link for the Reason.

https://www.caclubindia.com/forum/messages/2009/9/48985_reason_for_right_issue.asp