The Ministry of Corporate Affairs (“MCA”) by way of introduction of Companies (Amendment) Act, 2020 (“Amendment Act”) (effective January 22, 2021) had amended inter-alia Section 62(1)(a)(i) of the Companies Act, 2013, to provide that where a letter of offer for further issue of share capital is being issued by a company to the equity shareholders, such offer shall be for a minimum period of 15 (fifteen) days or “such lesser number of days as may be prescribed”.
Pursuant to the Amendment Act, MCA has now by way of the Companies (Share Capital and Debentures) Amendment Rules, 2021 (“Amendment Rules”) dated February 11, 2021, introduced Rule 12A in the Companies (Share Capital and Debentures) Rules, 2014, whereby the minimum period for which a rights offer under Section 62(1)(a)(i) is required to be kept open has been reduced to a period of 7 (seven) days from the date of the offer.
The Amendment Rules will come into force with effect from the April 1, 2021.
Please find a copy of the Amendment Act here and copy of the Amendment Rules here.
This update has been contributed by Aastha (Partner) and Swaraj Narula (Associate).
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