Shareholder shares in India
Business organization with partners have their responsibilities in the company shares to put forth the initiation of actions in the market. Every partners in the business should have their investment after the detailed discussion with the company members. Share issue process for limited company as well for the private limited companies differs in the way. It is essential to know about the ideas of issuing shares in India for those type of legal forms. Here we are on discussion for the share issue methods in India followed by the private limited and public limited companies.
Let us see how the shares are being issued in India for the registered companies.
Share issue process in India
Shares in the registered companies are issued to the public when it is public limited concern, whereas private limited companies can issue their shares for persons like friends, relatives, business partners etc. Compared to the public limited companies in India the private limited company have their restrictions in shares through some process. People in Private limited company can send an invitation to the public for the subscription of shares and then can issue it. Shares in the PVT LTD based companies are limited to 200 shareholders as per the Companies act of 2013. Methodologies for the share issues in India for the limited and private limited companies are mentioned as follows:
Follow on Public offering
Existing companies raise their fresh shares to the public or sales existing shares to the public with an offer document is the concept of follow on public offering. If the company satisfy the listing or obligations then the offer for sale may not be difficult
Initial Public Offering (IPO)
It is opposite to the follow public offering like an unlisted company issues their shares to the public or offer sale its current shares to the public.
Rights issue
It is a method of issuing fresh securities by the existing listed company for the existing shareholders. Simply the rights issue is the case in which the companies can raise the capital investment without the stake of existing shareholders
Preferential Issue
It is the type of method used by the listed company following their process of issuing shares to the in order to select the group of people who are not in public issue and rights issue. For immediate capital raising this preferential issue is used as per the companies act and SEBI regulations.
Private placement
It is a way of providing private placement offer letter to a group of selected persons by offering shares of the company.
