Draft Board Resolution for Rights Issue of Shares

Board-Resolution-Rights-Issue-Shares



As per the provisions of section 62(1) of Companies Act, 2013where at any time, a company having a share capital proposes to increase its subscribed capital by the issue of further shares, such shares shall be offered to persons who, at the date of the offer, are holders of equity shares of the company in proportion, as nearly as circumstances admit, to the paid-up share capital on those shares by sending a letter of offer.



Draft Board Resolution for Rights Issue of Shares

RESOLVED THAT pursuant to the provisions of section 62 and other applicable provisions, if any, of the Companies Act, 2013 (the “Act”) (including any statutory modification(s) or re-enactment thereof for the time being in force), the consent of the Board be and is hereby accorded to issue, _________ (number of equity shares) equity shares of face value of Rs __________ (face value) at a premium of Rs ________ (amount of premium) to the persons who at _______ (the date of the offer), are holders of the equity shares of the Company in proportion as nearly as circumstances admit of _______ (number of new equity shares to be offered to existing share as per the rights issue) for every ________ (number of existing equity shares in fraction of which new shares will be given), held on the aforesaid date, on the following terms and conditions:
(i)   That the full amount of Rs_____(per share value) including the premium in form of demand draft shall be payable along with the application for such shares in the prescribed application form of the Company.
(ii)  The offer for new equity shares now being made shall be limited to those persons who, as on _______ (date of offer or record date as the case may be), are holders of equity shares of the Company. Such persons are, however, entitled to apply for the additional shares out of those shares which are not taken up by any of the existing shareholders in the proportion to be decided by the Board of Directors at its discretion having regard to the proportion such equity shareholders have to the paid-up equity share capital of the Company.
(iii) The offer aforesaid shall include a right exercisable by the persons to renounce the shares being offered in favour of any other person(s) provided such renunciation is made before the time not being less than fifteen days from the date of the offer.
(iv)  Any profit on the sale or disposal of fractional share certificate and /or the equity shares not accepted by the offerees will be distributed to the existing shareholders in proportion to their holdings of equity shares.


(v)  The Share transfer book shall remain close from _______ to _______ (both days inclusive). The offer shall begin on ________ (date) and shall remain open till close of working hours on _______(time and date).
(vi) The application form along with demand draft towards the amount for subscribing to the shares , renunciation letter or request for accepting additional shares can be sent to the company at its registered office with the heading “ Rights Issue”

RESOLVED FURTHER THAT the draft letter of offer, renunciation and the application form of the Company placed before the Board and initialed by Chairman for the purpose of identification , be and is hereby approved and Mr./ Ms. ______________ (name of the person) Secretary of the Company is authorized to issue the notice of such offer to the holders of shares as on the aforesaid date. 
RESOLVED FURTHER THAT pursuant to section 117 of the Act read with rule no 24 of the Companies (Management and Administration) Rules, 2014, Mr. / Ms………. [name of the person] director/company secretary be and is hereby authorized to file form MGT-14 with the Registrar within the prescribed time along with the fee as prescribed in the Companies (Registration Offices and Fees) rules, 2014 and to do all the acts, deeds and things which are necessary to give effect to the aforesaid said resolution.
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