Tag Archives: preferential issue

ISSUE OF SHARES ON PREFERENTIAL BASIS


Where at any time, a company having a share capital proposes to increase its subscribed capital by the issue of further shares, such shares may be offered to any persons, if it is authorised by a special resolution, either for cash or for a consideration other than cash, if the price of such shares is determined by the valuation report of a registered valuer subject to such conditions as may be prescribed [Section 62(c) of the Companies Act, 2013]. These persons may include equity shareholders of the company referred to in clause (a) or employees of the company referred to clause (b). Section 62 of the Companies Act 2013 was discussed earlier here,

Rules 13 of the Companies (Share Capital and Debentures) Rules 2014 give us detailed procedure. Before discussing provisions in details, we may understand expression “Preferential Offer”.

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ALTERATION OF SHARE CAPITAL


Every business run on finance and share capital is base finance, hence life blood of a company.

PUBLICATION OF CAPITAL (SECTION 60):

Where any communication or publication of a company contains a statement of the amount of the authorise capital of the company, it shall also contain a statement in an equally prominent position and in equally conspicuous characters of the amount of the capital which has been subscribed and the amount paid – up.

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