A Company may issue the shares:
Answers
the Companies Act, 1956, holds that right shares are those shares which are issued after the original issue of shares but having an inherent right of the existing shareholders to subscribe to these shares in proportion to their holding.
Such shares must be offered to the existing equity shareholders on pro rata basis. The offer of this type of share shall be made in the form of a notice giving the particulars of shares offered and within a time not less than 15 days from the date of the offer for acceptance of such offer.
These shares can also be issued to the new members when the existing shareholders do not accept the offer within a period of 15 days or more. Usually, these shares are issued among the existing shareholders at a concessional rate. The existing shareholders are presented. ‘Letter of Offer and Application Form’ in proportion to their holding’s.
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