What "rights issue" do the shareholders of a company have under Companies Act, 1956?

What "rights issue" do the shareholders of a company have under Companies Act, 1956?


The rights and duties of shareholders are defined from time to time of issue of shares. The rights of shareholders are fixed which can't be altered unless the Companies Act gets modified.

Right issue which shareholders hold of a company under Companies Act, 1956 are as follows:-

1) Rights attached to shares of any class can be varied with the consent of shareholders holding not less then 75% of issued shares.

2) Rights of Dissenting Shareholders: Protection by Companies Act is given to the shareholders who doesn't consent to or vote for variation of their rights. If there is any variance in any rights of any class of shareholders then holders of not less than 10% of shares of that class can apply to the court to have the variation cancelled. It won't have any affect till it is been approved by the court.

3) Voting rights of the members: - Every member of public company which have the shares holding equity have votes in proportions to his share in paid up equity capital.

4) Preference shareholders don't have any voting rights. They can vote only on matters which are directly related to the rights attached to preference share capital.

There is a right to vote for every equity shareholder at general meeting. No company can stop any member from his voting right on any ground. The members voting rights can be changed if member doesn't make payment or other sums which are due against.
What are the eligibility criteria for an unlisted company to make public issue?
The eligibility criteria which have to be satisfied by the Unlisted Company to make public issue are as follows:…
What are the eligibility criteria for a listed company to make public issue?
The eligiblity criteria which need to be satisfied by the listed company to make a public issue are as follows:-…
Can a company make public issue of equity shares if partly paid shares are not fully paid up?
Yes, a company can make public issue of equity shares if partly paid shares are not fully paid as equity shares…
Post your comment