Student of B.A. LL.B (Hons), Batch of 2022
National Law University, Jodhpur
The Paper discusses the concept of Preferential issue of shares by a company under The Companies Act, 2013 (‘the Act’), Section 62 (1)(c) to ‘any person’ which has become a very common practice by companies in order to fulfil their financial requirements arising from new projects, debt-equity ratio considerations, workingcapital requirements and any other purpose. While discussing the meaning and relevance of the concept, the paper also delves into the application and the regulations and laws governing such. Firstly laws governing preferential issue by listed companies, Secondly we will be dealing with regulations and laws for Unlisted companies and lastly this paper while discussing the regulations and procedures which are to be undergone while issuing such shares will also point out the contemporary issues which encircles the preferential issue of shares and analyses to what extend these issues can be a roadblock in the successful implementation of this process.
Keywords: Preferential share, SEBI, Companies Act, ICDR, DEMAT