GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Right shares can be issued at any time after the expiry of
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One year from the first allotment of shares in the company
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Two years from the formation of a company
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(A) or (B) whichever is earlier.
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(A) or (B) whichever is latter.
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Explanation:
Detailed explanation-1: -Before issuing shares, a company has to be legally entitled to be able to issue them in accordance with its articles of association. Issuing of extra shares will require a resolution to be passed by a general meeting of the company shareholders.
Detailed explanation-2: -A rights share issue is an offering of rights given to a company’s existing shareholders, allowing them to purchase additional shares directly from the company at a discounted price, rather than buying them through the secondary market.
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