Tag Archives: right issue

Amendment to Share Capital and Debentures Rules


Ministry of Corporate Affairs recently introduced amendment to the Companies (Share Capital and Debentures) Amendment Rules 2015.

These Amendments shall come into force on publication on official gazette i.e.

Application of these Rules:

Rule 3 related to applicability of these rules have been substituted as under:

The provisions of these rules shall apply to –

(a) all unlisted public companies:

(b) all private companies: and

(c) listed companies so far as they do not contradict or conflict with any other regulation framed in this regard by the Securities and Exchange Board of India.

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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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SHARE CAPITAL (Companies Act, 2013)


We have discussed earlier post The Company under the Companies Bill 2012 which is still relevant when the bill become Act; all companies do not have share capital. Only companies limited by shares have share capital.

KIND OF SHARE CAPITAL (SECTION 43):

The share capital of companies limited by share shall be of two kinds, namely;

(a)  equity share capital;

(b) Preference share capital.

Here, use of two terms “Shall be” and “and” denote this is a requirement to have both kind of share capital but, according to further reading, company may have zero equity or preference share capital.

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MAJOR CAUTIONS UNDER PUBLIC OFFER (COMPANIES ACT, 2013)


In recent posts, we discussed provisions of Chapter III of the Companies Act, 2013. This is time to discuss major penal provisions in this chapter.

CRIMINAL LIABILITY FOR MIS-STATEMENT IN PROSPECTUS (SECTION 34):

Where a prospectus, issued, circulated or distributed:

a)    includes any statement which is untrue or misleading in form or context in which it is included; or

b)   where any inclusion or omission of any matter is likely to mislead;

Every person who authorises the issue of such prospectus shall be liable under section 447 i.e. fraud.

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ALLOTMENT OF SECURITIES (Companies Act 2013)


In recent posts, we have discussed matters related to prospectus. In this post we will discuss, matters related to issue and allotment of securities following public offer.

SECURITIES IN DEMATERIALISED FORM (SECTION 29):

Under this section;

  1. Every company making public offer; and
  2. Such other class or classes of companies as may be prescribed

shall issue the securities only in the dematerialised form.

When any company issue its securities in dematerialised form, provisions of the Depositories Act, 1996 and regulations made under that Act shall be applicable.

There is no bar for any other company to issue its securities in any form. Any other company may convert its securities into dematerialised form.

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