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Providing Everything You Need

  • Issuance of shares is a way for companies to raise capital by creating new ownership units and selling them to investors.

  • The modes of issuing shares include equity, Compulsorily Convertible Debentures (CCD), Compulsorily Convertible Preference Shares (CCPS), private placement, and rights issue.

  •  Equity refers to the ownership stake in a corporation, firm, or financial asset, CCD and CCPS are debt instruments that can be converted into equity at a later stage. 

  • Private placement involves the sale of shares to a select group of investors, while rights issue refers to the offer of additional shares to existing shareholders in proportion to their current holdings. 

  • The issuance of shares is an essential way for companies to raise capital, diversify their ownership base, and improve corporate governance4. It is crucial for companies to ensure that the issuance of shares is done correctly and in compliance with legal requirements to avoid any legal issues in the future.

  • Stamp duty on the issuance of shares is a tax levied by the government on the transfer of shares to ensure proper documentation and legal compliance.

  • It is calculated based on the value of the shares issued and varies from state to state in India.

  • Paying the required stamp duty is essential for validating share transactions, protecting shareholder rights, and avoiding penalties or legal issues due to non-compliance with the Indian Stamp Act.

  • Properly stamped share certificates serve as legal proof of ownership and are crucial for maintaining transparency and accountability in corporate transactions.

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