Issue
of equity shares
A public company may
raise capital by issue of equity shares through the following ways:
1. Public issue
2. Private placement
3. Rights issue
4. Bonus issue
Issue of equity shares
to the public through prospectus by a public company is called public issue. It
includes initial public offer and further public offer.
Private placement means
any offer of equity shares or invitation to subscribe equity shares to a select
group of persons by a company (other than by way of public offer) through issue
of a private placement offer letter and which satisfies the conditions
specified in Section 42 of the Indian Companies Act, 2013.
Issue of equity shares
to the existing shareholders of the company through a letter of offer is known
as rights issue.
Issue of equity shares
to the existing shareholders of the company at free of cost out of accumulated
profit is known as bonus issue.
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