Company Law

Types of Issue of Securities – an overview

Sr. No.

Types of issue of securities

Private Company

Public Company

(i)

Rights Issue [S. 62(1)(a)]Board resolution

to equity shareholders of the Co in proportion, as nearly as circumstances admit, to the paid-up share capital on those shares

(ii)

Employees’ Stock Option Scheme [S. 62(1)(b)]: Special resolution

to employees

(iii)

Any person [S. 62(1)(c)]: Special resolution

(a) Private Placement [S. 42, R. 14 of Co (PAS) Rules]: Refer (6) & (7) below

incl. Preferential allotment [R. 13 of Co (SCD) Rules] :

• to Shareholders only

• to Others

   

(b) Public Offer [Part I of Chapter III]:

(c) Sweat Equity shares [S. 54]: Refer (8) below

(iv)

Bonus Issue [S. 63(1), R. 14of Co (SCD) Rules]: Special resolution

Issue of fully paid-up Bonus Shares to its members in any manner, out of:

Free reserves/Securities Premium Account/Capital Redemption Reserve