Issue of Share Capital

According to the Companies Act of 2013, issuing shares involves a specific legal procedure, which includes passing resolutions and filing the necessary documents with the Ministry of Corporate Affairs (MCA). At G K B & Associates, we make sure your share issuance is handled correctly, strategically planned, and completely compliant, leaving no room for errors.

Benefits of Issuing Share Capital

Raise Funds for Expansion – Secure capital for new projects or operations.

Onboard Strategic Investors – Bring in partners who add value beyond funding.

Strengthen Financial Position – Improve debt-to-equity ratio.

Offer Employee Incentives – Use shares for ESOPs to retain top talent.

Meet Statutory or Regulatory Needs – Issue shares as part of compliance or restructuring.

Documents Needed for Issue of Share Capital

From the Company:

1. Certificate of Incorporation
2. Current Memorandum of Association (MoA) & Articles of Association (AoA)
3. Board Resolution approving the share issue
4. Shareholders’ approval (if required)

5. List of proposed allottees and their shareholding details
6. Offer Letter (Form PAS-4 for private placement)
7. Proof of valuation (from registered valuer, if applicable)
8. Digital Signature Certificate (DSC) of an authorized signatory

From Investors / Shareholders:

1. PAN card and address proof
2. Demat account details (for listed companies)

3. Application form for share subscription
4. Proof of payment for shares

Our Process

Understanding Your Needs & Choosing the Best Approach

We assess your funding goals and advise on the best share issue method — Rights Issue, Private Placement, Preferential Allotment, or Public Issue — considering compliance and strategy.

Resolutions & Creating the Offer

We prepare the necessary Board and Shareholders’ Resolutions and draft all offer documents as per legal requirements.

Managing Investor Subscriptions & Payments

We oversee the subscription process, ensure payments are received in the company's account, and update all statutory records.

Types of Share Issue

1. Rights Issue – Offered to existing shareholders in proportion to their holdings.
2. Private Placement – Offered to a select group of investors.
3. Preferential Allotment – Offered to specific investors at a pre-decided price.
4. Public Issue – Offered to the public (for listed companies).

Legal Requirements

Governed by Sections 42, 62, and 179 of the Companies Act, 2013. MCA filings must be completed within 30 days of allotment. Valuation must be by a Registered Valuer in case of preferential allotment or private placement.

Timeframe: 7–15 working days depending on the type of issue and MCA processing.

Frequently Asked Questions

What is the meaning of issue of share capital in India?

Issue of share capital refers to the process by which a company offers and allots shares to its shareholders or investors in return for capital, in compliance with the Companies Act, 2013 and ROC regulations.

What are the types of share capital a company can issue?

A company may issue:

Equity Share Capital
Preference Share Capital
Bonus Shares
Rights Issue
Private Placement or Preferential Allotment

Why is issuing share capital important for a company?

Issuing share capital helps companies to raise funds, expand operations, strengthen financial stability, attract investors, and meet statutory compliance requirements.

What is the procedure for issuing share capital in India?

The process generally includes:

Holding a Board Meeting
Passing necessary resolutions
Filing forms with the Registrar of Companies (ROC) such as PAS-3
Allotting shares to subscribers
Updating the Register of Members

What documents are required for issue of share capital?

Key documents include:

Board and shareholders’ resolutions
Share application forms and allotment return
Updated MOA & AOA (if required)
ROC forms such as PAS-3 and MGT-7

Issue of Share Capital