Procedure For Allotment of Shares on Right Basis


As per the provisions of section 62(1) of Companies Act, 2013 where 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.

Procedure For Allotment of Shares on Right Basis

Step 1: 

Approval of the Board for Right Issue

Issue notice of board meeting to all the directors at least seven days before the date of board meeting.

Hold the board meeting to get the approval of the board for right issue and Letter of Offer.
Step 2 :
Issue Letter of Offer

Issue Letter of Offer to all the existing shareholders at least 3 days before opening of issue. The Letter of Offer shall specify the number of shares offered and limiting a time not being less than fifteen days and not exceeding thirty days from the date of the offer within which the offer, if not accepted, shall be deemed to have been declined.

Step 3 : 

Approval of the Board for allotment of shares

After the closer of issue, hold another board meeting for allotment and issue of shares.
Step 4 : 
Filing of PAS-3 and  MGT-14
After passing Board Resolution following forms required to be filed with ROC

1.  PAS-3 within 30 days from the date of allotment of shares.

2.  MGT-14 within 30 days from the date of passing board resolution.

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