Companies (Further issue of shares) Regulations, 2020 [“Regulations”] provide procedures for issuance of further capital including preference shares. These are in addition to the requirements included in section 83 of the Companies Act, 2017 [“Act”]. Following is the synopsis of these Regulations.
Regulation 3 and Section 83
Any company may issue right shares subject to the following:
• Right share to be offered to existing members of the company in proportion to the shares held by them. (S.83)
• Board of Directors [“BOD”] will approve decision for right issue. (S.83)