Rights Issue and Further Issue of Shares Under Section 62
When a company proposes to increase subscribed capital, Section 62 is the starting point. The route may be rights issue to existing shareholders, ESOP, or issue to other persons subject to approvals and rules.
For broader context, see the Share Issue Compliance: Rights Issue, Private Placement and Allotment Basics.
Section 62 base
Section 62 applies where a company having share capital proposes to increase its subscribed capital by issue of further shares. The section sets routes such as offer to existing equity shareholders, employees under a scheme, or other persons subject to conditions.
For the connected rule, example or next step, see Rights Issue vs Private Placement: Founder Decision Guide.
Route comparison
| Route | Control |
|---|---|
| Rights issue | Offer existing equity shareholders in proportion as nearly as circumstances admit. |
| ESOP | Shareholder approval and scheme conditions need review. |
| Preferential/private issue | Approval, valuation, offer and PAS-3 controls matter. |
| Renunciation/decline | Track shareholder response and timelines. |
| Allotment closure | PAS-3, register and share certificate update. |
Pre-issue checklist
- Check authorised share capital and Articles.
- Prepare board note explaining purpose and route.
- Draft offer letter and timeline tracker.
- Review valuation and pricing where required.
- Close allotment, PAS-3 and register update together.
Finin2min warning
Official sources used
This article is intentionally source-limited to official India Code / MCA material. Verify final filing positions with the latest Act, Rules, MCA forms and portal advisories before publishing.
- India Code: Section 62 — Further Issue of Share Capital
- India Code: Section 39 — Allotment of Securities
- India Code: Section 88 — Register of Members etc.
- India Code: Companies Act, 2013 official PDF
FAQs
Section 62 governs further issue of share capital.
No. Section 62 contains different routes including existing shareholders, employees under scheme and other persons subject to conditions.
Return of allotment and statutory register updates should be completed where applicable.
Source and review trail
Use the current official instrument, portal or regulator publication before acting. This panel separates the category authority from page-specific references.
- Primary category
- Companies Act & MCA
- Official starting point
- www.mca.gov.in