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Reduction Of Share Capital Without The Sanction Of The Court: -Share & Share Capital

   Posted On :  14.05.2018 09:09 pm

There are some cases in which there is reduction of share capital and no confirmation by the court is necessary.

Reduction Of Share Capital Without The Sanction Of The Court:
 
 
There are some cases in which there is reduction of share capital and no confirmation by the court is necessary. These are:
 
            Forfeiture of shares.
 
            Surrender of shares
 
            Diminution of capital
 
            Redemption of redeemable preference shares.
 
            Purchase of shares of a member by the company under section 402.
 
            Purchase of its own shares as per section 77A
 
 

Raising Of Capital / Issue Of Shares

 
 
Issue of shares may be made in 3 ways:
            
1. By private placement of shares;
2. By allotting entire shares to an issue-house, which in turn, offers the shares for sale to the public; and
3. By inviting the public to subscribe for shares in the company through a prospectus.

Private Placement Of Shares:

 
 
Shares are issued privately to a small number of persons known to the promoters or related to them by family connections.
 

By An Offer For Sale:

 
 
The Issue-house publishes a document called an offer for sale, with an application form attached, offering to the public shares or debentures for sale at a price higher than what is paid by it or at par. This document is deemed to be a prospectus [Section 64(1)].
 

By Inviting Public Through Prospectus:

 
The company invites offers from members of the public to subscribe for the shares or debentures through prospectus.


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