Right

Issue of Shares

Start your right issue of shares process online at just 12,999/- only/.

Ebizfiling helps companies issue additional shares to existing shareholders with complete MCA and ROC compliance.

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Right Issue of Shares 

About Our Service

A Right Issue of Shares allows a company to raise additional capital by offering new shares to its existing shareholders in proportion to their current holdings. It is one of the easiest and most cost-effective methods for companies to increase equity without inviting new investors.

Under Section 62(1)(a) of the Companies Act, 2013, a company can make a rights issue by sending an official offer letter (Form PAS-4) to all shareholders. This process ensures transparency and protects existing shareholders from dilution of ownership.

Ebizfiling provides complete support for preparing offer letters, board resolutions, filing Form PAS-3 with the Registrar of Companies (ROC), and ensuring all legal timelines and compliance requirements are met. Our team ensures that your rights issue is carried out smoothly, efficiently, and in full accordance with MCA guidelines.

 Types of Right issue of shares 

  1. Fully paid rights issue: Where an applicant has to pay the entire issue amount at the time of the application of the issue is called a fully paid rights issue.

  2. Partly paid rights issue: Where an applicant is required to pay only a partial amount at the time of the application is called a partly paid rights while the balance amount is to be paid as and when the company makes the subsequent calls.

  3. Renounce-able rights issue: In this kind of rights issue, the rights issue can b transferred or sold in the open market to other investors. When a renounceable rights holder does not wish to subscribe to his rights, he can opt to transfer his rights.

  4. Non-renounceable rights issue: A non-renounceable rights issue cannot be transferred or sold to anyone. When the renounceable rights issue holder is no more willing to exercise his right to buy the rights share will have the only option to give up his rights and let the rights issue lapse.

Understanding-the-Process-and-Benefits-of-Right-Issue-of-Shares

Who Can Apply for a Right Issue of Shares  

  • Private Limited Companies needing additional capital

  • Public Companies planning to raise equity internally

  • Startups or SMEs wanting to strengthen their capital without new investors

  • Companies wanting to reward or offer shares to loyal shareholders

Why Choose Ebizfiling for Right Issue of Shares ?

Ebizfiling ensures that your rights issue process complies with all company law provisions and MCA timelines. Our experienced professionals manage everything  from drafting documents to ROC filing so you can raise funds confidently.

We serve startups, SMEs, and established companies looking to expand their capital base without external dilution. With Ebizfiling’s expert guidance, your right issue will be handled accurately and within deadlines. Our expert services are Share transfer & transmission and Increased in Authorized Capital.

You may get in touch with our compliance manager on 09643203209 or email info@ebizfiling.com for free consultation.

Prices for Rights Issue of Shares / Share Offering services

Essential

12999/-

(All Inclusive)

  • Drafting of documents
  • Filing of Form PAS 3
  • Filing Form MGT 14

Benefits of Right Issue of Shares  

Easy Fundraising

Companies can raise funds quickly without seeking external investors or new shareholders.

Shareholder Priority

Existing shareholders get the first right to purchase new shares before outsiders.

Cost Effective

 No need for public issue expenses; the right issue process is economical and simple.

Ownership Control

Promoters can maintain their shareholding proportion by subscribing to new shares.

Faster Approval

With simplified MCA procedures, rights issue approvals happen much faster.

Compliance Support

Ebizfiling ensures end-to-end documentation and ROC compliance within timelines.

Documents required for Rights Issue of shares

  • Details of the New Shareholder
  • Details of the total amount of paid up capital to be increased
  • Name of your Private Limited Company
  • E-copy of MOA
  • E-copy of AOA (AOA shall contain a clause for Right issue of shares along with a right to renounce)
  • Photographs of Shareholder
  • DSC of existing directors
  • Self attested PAN Card of all directors
  • Self attested ID Proof of all directors (Driving License/Passport/Voter ID)
  • Self Attested Address Proof of all directors (Electricity Bill / Latest Bank Statement/Mobile Bill-not older than 2 months)
  • Percentage of Share holding

Procedure for Right issue of Equity shares

 

5 Easy Steps

1

Fill in the simple checklist

2

Verification of the documents

3

Drafting of the documents

4

Filing of Form MGT 14

5

Filing of Form PAS 3

How Ebizfiling Helps in Right Issue of Shares ?

1. Legal Drafting: We prepare accurate board resolutions, offer letters, and MCA forms as per the Companies Act, 2013.

2. End-to-End Filing: From issuing offers to filing PAS-3, we handle all steps and documentation with accuracy.

3. Expert Compliance: Our professionals ensure ROC filings meet the latest MCA and FDI rules.

4. Timeline Management: We ensure your right issue is completed within legal deadlines to avoid penalties.

5. Remote Assistance: You can complete the entire process online without visiting any office.

6. Post-Issue Support: We help maintain share registers and provide post-issue compliance guidance.

FAQs

FAQs on Right Issue of Shares  

Get answers to all your queries

  • What is a Right Issue of Shares?

    A right issue is when a company offers new shares to its existing shareholders in proportion to their current holdings.

  • Who is eligible for a right issue?

    Only existing shareholders as on the record date are eligible to apply for the rights issue shares.

  • Is shareholder approval needed for a right issue?

    Yes, the board approves the issue and notifies shareholders through an offer letter.

  • What is the time limit for completing a right issue?

    The offer must remain open for a minimum of 15 days and a maximum of 30 days.

  • Which ROC form is used for reporting right issue allotment?

    Form PAS-3 must be filed with the Registrar of Companies within 30 days of allotment.

  • Can a shareholder renounce their rights?

    Yes, a shareholder can renounce their rights in favor of another person, known as renunciation.

  • What if shareholders do not subscribe to their rights?

    Unsubscribed shares can be offered to other shareholders or new investors as per company approval.

  • Is valuation required for issuing right shares?

    Generally not, unless shares are issued to foreign shareholders or under FEMA regulations.

  • Can right shares be issued at a discount?

    No, companies cannot issue shares below their face value; however, they may be issued at par or premium.

  • What is the difference between right issue and bonus issue?

    In a right issue, shareholders pay for new shares. In a bonus issue, shares are issued free of cost from reserves.

  • Can a private company make a right issue?

    Yes, both private and public companies can issue right shares to their existing shareholders.

  • What happens after allotment of right shares?

    The company updates its share capital records and files Form PAS-3 with ROC to reflect the allotment.

  • What is Form PAS-4 used for?

    Form PAS-4 is used as an offer letter to inform shareholders about the number, price, and ratio of shares offered.

  • What is the minimum subscription required?

    There’s no fixed minimum, but at least one shareholder must accept the offer for the issue to proceed.

  • Can right issue shares be partly paid?

    Yes, companies may issue partly paid-up shares, subject to compliance with their Articles of Association.

  • Do right shares increase authorized capital?

    If existing authorized capital is insufficient, it must be increased before the rights issue.

  • Can non-shareholders apply for right shares?

    Only after renunciation by an existing shareholder can a non-shareholder subscribe to right shares.

  • What penalties apply for late filing of PAS-3?

    Delay in filing PAS-3 attracts additional ROC fees and may result in non-compliance notices.

  • Are right issues allowed for foreign shareholders?

    Yes, but it must comply with FEMA and RBI regulations for pricing and reporting.

  • How can Ebizfiling assist with the right issue?

    Ebizfiling handles drafting, ROC filings, FEMA compliance (if applicable), and ensures the process is legally valid and timely.

Reviews

  • A Nadeem

    A Nadeem

    04 Mar 2024

    Ebizfiling has consistently provided me with top-notch compliance services. They have simplified a complex and often daunting aspect of running a business, allowing me to maintain my peace of mind and focus on business growth.

  • Abhijit Chirde

    Abhijit Chirde

    04 Mar 2024

    Ebizfilling team explained every details and supported in compliance fillings. Mr. Rakesh B has been very helpful in getting things done swiftly and efficiently.

  • Client Review, Ebizfiling

    Ajit Mehra

    29 Jul 2018

    I had already missed the ITR date until I came across their Facebook post which reminded me of the same. I simply contacted them and they did it all.

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