FURTHER ISSUE AND ALLOTMENT
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:
1. By way of rights issue or bonus issue in accordance with the provisions of this Act or
2. Through private placement by complying with the provisions of Part II Chapter III of the Act.
A public company may issue any of the aforesaid securities by way of a public offer or rights/ bonus issue or private placement. Public Offer here includes Initial Public Offer (IPO) or Further Public Offer (FPO) of securities to the public by a company, or an offer for sale (OFS) of securities to the public by an existing shareholder, through issue of a prospectus.
REASONS FOR FURTHER ISSUE AND ALLOTMENT OF SHARES
1. Fund Requirements: 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.
2. Capitalization of Profits: 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. Bonus shares are issued to the existing shareholders only against the shares held by them in predetermined exchange ratio.
3. Right Shares: Rights Issue is a subscription rights to buy additional securities in a company made only to the company's existing security holders. When the rights are for equity securities, such as shares, in a public company, it is a non-dilutive pro rata way to raise capital. With the issued rights, existing security-holders have the privilege to buy a specified number of new securities from the issuer at a specified price within a subscription period.
HOW WE HELP WITH RESIGNATION OR REMOVAL OF DIRECTOR
1. Consultation: As there are complexities involved from Legal and financial point of view, we can assist you with the procedure for issue and allotment of
further shares and the matters related thereto.
2. Resolutions: Then we will provide timelines, documents and do the compliances for you.
3. Filing: We will timely file applicable returns, documents and other formalities with the Ministry of Corporate Affairs to effectuate the resignation or removal of the Director.