In India, Companies Act, 2013 discusses the procedure of allotment of shares and it is read with Companies (Prospectus and Allotment of Securities) Rules, 2014.
Section 23 of the Companies Act, 2013 discusses the option to issue shares. In order to issue share the company needs to be a registered company. There are four ways in which shares can be issued:
Public issue (includes Initial Public Offering and Further Public Offering)
Where a Public company can issue shares through Public Issue, Private Placement, Rights issue or Bonus issue, a Private Company may issue shares by way of Rights issue or Bonus issue and Private Placement.
Verify Articles of the CompanyArticles of the Company governs any internal procedure for issue of shares of a private limited than covered in Companies Act
Board MeetingCall a board meeting to take decision on issue of shares.
The authorised capital must be within the limit
Get amount from
How it works
Only board of directors by passing resolution can issue shares of a private limited company. The powers of board must be within the authority granted by General meeting
Yes, before issue of share
It dependents on the type of process involved