Whenever the Company requires fund for its projects, it issues shares to the public for subscription. the Companies can acquire huge amount of investment by public issues of shares without incurring heavy expenses and fixed financial charges. Few Companies might want to increase its share capital base so as to avoid unwanted hostile takeovers and also not to increase the share capital in the monetary terms than companies issue and allot Bonus shares.
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The Government of India has set down certain rules regarding the companies prospectus and allotment of securities. These rules came into practice from the year 2014 and have been amended from time to time. These rules state the process of issuing a prospectus to invite subscribers to subscribe for the securities by a company. It also deals with the allotment of securities for the subscribers. The companies prospectus and allotment of securities rules along with the amended rules.
Whenever the Company needs fund it either utilizes its reserves or issues and allots further shares to either existing shareholders or to the public. Primarily, issues can be classified as a Public, Rights or preferential issues also known as private placements. While public and rights issues involve a detailed procedure, private placements or preferential issues are relatively simpler. For a private company the section provides that a private company may issue securities by way of rights issue or bonus issue in accordance with the provisions of this Act.
Resolution of Meeting
Details of Share Holder
