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Rights Issue Offer Periods & Exemptions Under Companies Act, 2013
['Author Info', 'Name', 'Qualification', 'Location', 'Articles Published', 'View Full Profile', 'More Pradyumna Nagar', 'August']
taxguruin
AdvertisementSummary: A rights issue under Section 62 of the Companies Act, 2013 allows companies to raise additional capital by offering new shares to existing shareholders.
Rights Issue: Standard Timelines & 90% Fast-Track ExemptionA rights issue allows a company to raise additional capital by offering new shares to its existing equity holders in proportion to their current holdings.
Standard Statutory Timelines: The Offer WindowMinimum Offer Period (7 Days): Section 62(1)(a)(i) of the Act originally required that shareholders be given at least 15 days to consider a rights offer.
In summary, under the standard rules the rights issue timeline looks like this:Board meeting and approval of rights issue terms.
In conclusion, the Companies Act provides a safe, statutory shortcut for private companies to expedite rights issues.