Coronavirus disease (COVID-19) is an infectious disease caused by a newly discovered coronavirus. #Stay_Home_Stay_Safe

Issuance of Shares to Existing shareholders

About of Service

1. Consultation and Advisory:

  • Strategic Advice: Provide expert advice on the rationale, benefits, and implications of issuing shares to existing shareholders.
  • Regulatory Compliance: Guide on legal requirements and compliance with company laws and regulations.

2. Document Preparation:

  • Share Issuance Proposal: Draft a detailed proposal outlining the terms and conditions of the share issuance.
  • Board and Shareholders' Resolutions: Prepare resolutions required for authorizing the share issuance and approval by the Board of Directors and shareholders.
  • Share Certificates: Prepare and issue share certificates reflecting the new shares allocated to existing shareholders.

3. Regulatory Filing and Submission:

  • Application Forms: Complete and file necessary forms with the Registrar of Companies (RoC) or equivalent regulatory authority, such as Forms for allotment of shares.
  • Compliance Documents: Prepare and submit compliance reports or statements required for regulatory approval.

4. Valuation and Pricing:

  • Share Valuation: Conduct or assist in determining the fair value of shares being issued, if required.
  • Pricing Strategy: Advise on pricing strategies for the new shares to be issued to existing shareholders.

5. Share Allotment Process:

  • Allocation: Manage the process of allocating shares to existing shareholders based on their existing holdings and rights.
  • Record Updates: Update the company’s share register and records to reflect the new share issuance and changes in shareholder ownership.

6. Legal and Compliance Checks:

  • Compliance Review: Ensure that all aspects of the share issuance comply with legal requirements, including shareholder rights and statutory provisions.
  • Legal Documentation: Prepare or review legal documents related to the share issuance, including subscription agreements or share allotment agreements.

7. Communication and Notification:

  • Shareholder Communication: Draft and send formal notifications to existing shareholders regarding the share issuance, including details of their entitlement and instructions for payment.
  • Stakeholder Updates: Communicate the outcome of the share issuance to other relevant stakeholders, if necessary.

8. Post-Issuance Support:

  • Review and Compliance Check: Conduct a post-issuance review to ensure all records are updated and compliant with regulatory requirements.
  • Ongoing Assistance: Pro

Uses and Benefits
  • Consultation and Advisory: Provide expert advice on the rationale, process, and regulatory compliance for issuing shares to existing shareholders.
  • Document Preparation: Draft and prepare all necessary documentation, including resolutions, share issuance proposals, and share certificates.
  • Regulatory Filing and Submission: Complete and file required forms with the Registrar of Companies (RoC) or relevant authorities, managing the submission process.
  • Valuation and Pricing: Assist with the valuation of shares and advise on appropriate pricing strategies for the issuance
  • Share Allotment Process: Manage the allocation of shares to existing shareholders and update the company’s share register accordingly.
  • Legal and Compliance Checks: Ensure the issuance process adheres to all legal and regulatory requirements, including necessary approvals and documentation.
  • Communication and Notification: Draft and send formal notifications to shareholders about the share issuance, including details and instructions.

Select your own Associate

Charges Structure & Our Scope of Work

Additional Disclosure

  1. Purpose of Share Issuance:

    • Clearly state the reasons why the company is issuing new shares to existing shareholders. This could include raising capital for expansion, funding new projects, reducing debt, or other strategic initiatives.

  2. Details of the Share Issuance:

    • Specify the total number of shares being issued and the type of shares (common shares, preferred shares, etc.).
    • Describe the price or method used to determine the price per share (e.g., market value, discounted price, nominal value).
    • Outline any conditions or restrictions associated with the share issuance.

  3. Rights and Privileges of New Shares:

    • Explain the rights and privileges attached to the new shares being issued, such as voting rights, dividend entitlements, and liquidation preferences.

  4. Impact on Existing Shareholders:

    • Describe how the share issuance will impact existing shareholders, including any dilution of ownership percentage or voting rights.
    • Provide details on any preemptive rights or rights of first refusal that existing shareholders may have exercised or waived.

  5. Use of Proceeds:

    • Disclose how the proceeds from the share issuance will be utilized by the company. Provide information on planned investments, projects, or activities that will benefit from the additional capital.

  6. Regulatory Compliance:

    • Confirm that the share issuance complies with applicable laws, regulations, and the company's Articles of Association or Bylaws.

  7. Board and Shareholder Approval:

    • State whether the share issuance has been approved by the company's board of directors and shareholders, and provide details of the approval process.

  8. Risk Factors:

    • Discuss any potential risks or uncertainties associated with the share issuance that shareholders should be aware of, such as market conditions, regulatory changes, or financial implications.

Terms & Conditions

Documents & Detail Required

1. Board Resolution:

  • Document: A formal resolution passed by the Board of Directors authorizing the issuance of shares.
  • Purpose: To officially approve the issuance and set the terms and conditions for the share allocation.

2. Shareholders’ Resolution:

  • Document: A resolution passed by the shareholders, often in a general meeting, approving the issuance of new shares and any changes to the share capital.
  • Purpose: To obtain the shareholders' consent for the issuance, especially if the issuance affects their rights or existing shareholding.

3. Share Issuance Proposal:

  • Document: A detailed proposal outlining the terms of the share issuance, including the number of shares, pricing, and any other relevant details.
  • Purpose: To provide a clear and formal description of the share issuance terms.

4. Application Forms:

  • Document: Prescribed forms for the Registrar of Companies (RoC) or relevant regulatory authority, such as Form PAS-3 in India for the return of allotment.
  • Purpose: To officially document and report the issuance of shares to the regulatory authorities.

5. Share Subscription Agreements:

  • Document: Agreements between the company and the existing shareholders detailing the terms of the share subscription.
  • Purpose: To formalize the commitment of shareholders to purchase the new shares.

6. Share Certificates:

  • Document: New share certificates issued to shareholders reflecting the additional shares allocated to them.
  • Purpose: To provide formal evidence of the new share ownership.

7. Proof of Payment:

  • Document: Evidence of payment or the agreed consideration for the newly issued shares, such as bank receipts or payment vouchers.
  • Purpose: To confirm that payment for the new shares has been received.

8. Updated Share Register:

  • Document: An updated register of shareholders reflecting the new share issuance and changes in shareholding.
  • Purpose: To maintain accurate records of share ownership after the issuance.

9. Compliance Certificates:

  • Document: Certificates or statements confirming compliance with applicable legal and regulatory requirements for the share issuance.
  • Purpose: To ensure that the issuance is compliant with statutory regulations and corporate governance practices.

10. Regulatory Filings:

  • Document: Any additional documents required by the RoC or regulatory authority, such as financial statements or compliance reports.
  • Purpose: To meet regulatory requirements and provide necessary disclosures.

11. Covering Letter:

  • Document: A letter addressed to the RoC or relevant authority summarizing the share issuance and enclosing all necessary documents.
  • Purpose: To formally request the processing and registration of the new share issuance.

12. Resolution for Alteration of Share Capital:

  • Document: If applicable, a resolution to alter the share capital in the company’s MOA or Articles of Association.
  • Purpose: To officially update the company’s share capital structure in line with the new share issuance.

Please Note Down Your Querie

OUR REVIEW

FAQ'S

1. What is meant by the issuance of shares to existing shareholders?

Issuing shares to existing shareholders involves offering additional shares to the current owners of the company, typically in proportion to their existing holdings, to raise capital or for other corporate purposes.

2. Why would a company issue shares to its existing shareholders?

Companies issue shares to existing shareholders to raise capital for expansion, fund projects, or strengthen the company’s financial position while providing shareholders the opportunity to increase their stake in the company

3. What are the benefits for existing shareholders when new shares are issued?

Existing shareholders benefit by increasing their ownership percentage, potentially gaining additional dividends, and having the opportunity to participate in the company's growth and value appreciation.

4. What documents are required for the issuance of shares?

Required documents typically include board and shareholders' resolutions, share issuance proposals, share subscription agreements, completed regulatory forms, share certificates, and proof of payment.

5. How is the price of the new shares determined?

The price is typically determined based on the company’s valuation, current market conditions, and financial performance, often guided by a professional valuation or pricing strategy.

6. What is the process for issuing shares to existing shareholders?

The process includes obtaining board and shareholder approvals, preparing and filing necessary documents with the Registrar of Companies (RoC), managing the allocation and issuance of shares, and updating company records

7. How long does the share issuance process take?

The process can take several weeks to a few months, depending on the complexity of the issuance, regulatory requirements, and the efficiency of the administrative procedures.