Monday, December 25, 2017

What Is Right Issue Definition And Meaning

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What Is Right Issue Definition And Meaning

A right issue involves selling securities in the primary market by issuing rights to the existing shareholders. When a company issues additional equity capital, it has to be offered in the first instance to the existing shareholders on a pro rata (proportional) basis. This is required under Section 81 of the Companies Act 1956. The shareholders however, may by a special resolution forfeit this right, partially or fully, to enable a company to issue additional capital to the public.

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