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Issue of Shares

Q: How is the price of a share decided during an issue?

For listed companies, the share price is determined by market demand and supply. For unlisted private companies, the share price is typically determined by valuation experts (e.g., Chartered Accountants, Merchant Bankers) who assess the company's financial health, assets, industry, and prospects.

Q: How long does the process of issuing shares take?

The timeline varies significantly based on the methods of issuing shares. A right issue of shares or a private placement can take 1-3 months, while a public issue (IPO/FPO) can extend from 6 months to over a year due to extensive regulatory requirements.

Q: Can a private limited company issue shares to the public?

No, a private limited company is restricted from inviting the public to subscribe to its shares. It can only issue shares through private placement (to identified persons) or a rights issue of shares (to existing shareholders). It must convert into a public limited company to offer shares to the public.

Q: What happens if more applications are received than shares offered (oversubscription)?

In case of oversubscription, shares are allotted proportionally (pro-rata basis) as per the terms stated in the offer document. Companies also have the option to retain some oversubscription amount as per regulations, usually up to a certain percentage.

Q: What is the difference between a rights issue and a bonus issue?

A right issue of shares involves offering new shares to existing shareholders for cash consideration, usually at a discount, allowing them to increase their holding or sell their rights. A bonus issue of shares, on the other hand, provides additional shares to existing shareholders free of cost, capitalising the company's reserves.

Q: Do I need a Demat account to receive shares?

A Demat account is mandatory for receiving shares issued by a public limited company (listed or unlisted). For unlisted private limited companies, shares can still be held in physical form, but many are now moving towards voluntary dematerialisation, making a Demat account increasingly common.

The issue of shares is essential for raising capital and expanding ownership. Get expert support from RegisterKaro for legal drafting, ROC compliance, and seamless online share allotment.

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What Sets Us Apart

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MCA Certified Experts

10,000+

Trusted Reviews

2500+

Monthly Clients Onboardings

Serving Businesses Across India

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Frequently Asked Questions (FAQs)

What is the minimum number of shares a private limited company must issue?

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A private limited company in India must have a minimum paid-up share capital. While recent amendments have removed the Rs. 1 Lakh requirement, the number of shares issued will depend on the face value chosen by the company (e.g., 10,000 shares at Rs. 10 each).

How is the price of a share decided during an issue?

How long does the process of issuing shares take?

Can a private limited company issue shares to the public?

What happens if more applications are received than shares offered (oversubscription)?

What is the difference between a rights issue and a bonus issue?

Do I need a Demat account to receive shares?

Why Choose RegisterKaro for the Issue of Shares?

Navigating the intricacies of the issue of shares in India can be daunting. At RegisterKaro, we provide comprehensive, reliable support to ensure your capital raising process is seamless and fully compliant.

Expert Drafting of Share Allotment Documents: Our team prepares all essential documents like PAS-3, share certificates, allotment letters, and maintains statutory registers with precision.
Faster Turnaround with ROC Approvals: We help you complete the entire process, including filings and certificate issuance, within defined timelines to avoid penalties.
Tailored Guidance Based on Company Type: Whether you're a startup, a growing private limited company, or an LLP, RegisterKaro customises its share issuance strategy to fit your structure.
Seamless Handling of Bonus and Rights Issues: We handle complex share structures, including bonus shares, rights issues, and ESOPs, with clarity and compliance.
Dedicated Support for Post-Issue Requirements: Continued assistance with share register maintenance, investor queries, and ongoing secretarial compliance.

Why Choose RegisterKaro for the Issue of Shares?

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