PROCEDURE FOR ISSUING OF SHARES:
A Public company can issue shares by way of public issue, rights issue or bonus issue and
For public issuing of shares, the following
steps are required to be fulfilled:
1. The company must be a registered
company with the registrar.
2. Prospectus bearing the
invitation for buying of
the company to the public.
3. The prospectus
must be submitted
to the registrar (SEBI) before publishing.
4. The prospectus should have the required information about
❖ Name of
❖ Terms of issue
❖ Minimum subscription
❖ Type of
❖ Previous years performance
❖ Opening and closing dates
❖ Application form
❖ Bank details
5. The Registrar after confirming amenability publishes the prospectus
After selecting the applicants for allotment of shares, a regret letter is sent to everyone else
and share certificate is
issued after the share allotment is done.
The remaining shares are then allocated on call on dates. Depending on the number of shares, the calls
made for the remaining shares.
STATUTORY LAW REFERENCE (INDIAN KANOON):
▪ Section 2(84), Section
26, Section 42 and Section
of Companies Act
▪ Companies (Prospectus
and Allotment of Securities) Rules, 2014.
▪ Securities and Exchange Board
India Act, 1992.
▪ I.T Cube India (P) Ltd vs. I.T
Inc (2006) 69 SCL 319 (kar)
▪ Khoday Distilleries v. CIT, Civil Appeal
▪ Vodafone India
Services Private Limited
v. UOI (WP No.871 of
2014, Bombay HC
IMPORTANT DO (S) AND DON’T (S):
deal with the market intermediaries
registered with SEBI /
▪ Collect photocopies of
all documents executed for
on its execution.
Ensure that the documents
or forms for
registration are fully filled in.
mention all the details clearly in the prospectus and certificate
▪ Mention clearly what is
the mode of issue of shares.
▪ That the requisite
in the act is followed.