5 Questions
What is a 'rights issue' in the context of the text?
An offer of specified securities by a listed issuer to the shareholders of the issuer company as on the record date
What is the time limit within which the offer of shares should be made in a 'rights issue'?
Not less than 15 days and not exceeding thirty days from the date of the offer
What is included in the 'rights issue' offer, unless the articles of the company otherwise provide?
A right exercisable by the person concerned to renounce the shares offered to him or any of them in favor of any other person
Who are the recipients of the 'rights issue' offer?
Shareholders of the issuer company as on the record date
What does 'rights issue' deal with, as per the text?
Issue of right shares
Study Notes
Rights Issue
- A rights issue is an offer of new shares to existing shareholders in proportion to their existing holdings.
- The offer of shares in a rights issue should be made within a specific time limit, which is typically 15-20 days.
- The rights issue offer includes the right to renounce the shares in favour of others, unless the articles of the company otherwise provide.
- The recipients of the rights issue offer are the existing shareholders of the company.
- A rights issue deals with the issue of new shares to existing shareholders to raise additional capital.
Test your knowledge of Company Account Chapter 1: Rights Issue of Shares under Section 62 with this quiz. Assess your understanding of the conditions and requirements related to rights issues and their implications for listed issuers and shareholders.
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