In most cases, it is carried out with the aim of attracting Money into society, and its result is an increase authorized capital... In addition, the purpose of this procedure may be to expand the circle of shareholders or to carry out some form of reorganization.
From the point of view of the procedure for carrying out the additional issue, it has much in common with initial placement stocks, however, there are still a number of features characteristic of it.
Features of the additional issue of shares
Before making additional issue valuable papers make sure the following conditions are met.
- All issues of securities carried out by the company earlier have been fully completed. That is, the shares (bonds) are fully paid, reports on the results of the holding are registered in established order, the results of the issues were approved at the general meeting of shareholders, and the corresponding changes were reflected in the charter of the company.
- An additional issue is carried out in an amount not exceeding the number of declared shares (shares that the company is entitled to place in addition to those already placed). Their number and characteristics should be defined in the charter.
If the charter does not specify authorized shares in an amount sufficient for an additional issue, it is recommended that a decision on authorized shares be made at the same meeting at which the issue of a new issue will be considered. - The company carries out the necessary disclosure of information in the manner prescribed by law.
Methods for placing additional issues of securities
The legislation defines the following ways of placing additional issue securities:
- distribution to shareholders;
- subscription (can be either open or closed);
- conversion of securities into shares (the conversion algorithm is determined by the charter of the company and the terms of the issue of securities).
Stages of additional issue of shares
Conventionally, the procedure for conducting an additional issue of shares can be divided into several interrelated stages.
- Decision-making on additional issue.
The body competent to make such a decision can be either the general meeting of shareholders or the board of directors, if such a right is granted to it by the charter of the company. However, there are statutory restrictions (volume of issue, terms of placement, type of company, etc.), upon the occurrence of which the council is obliged to transfer its right to make the specified decision to the meeting.
- Approval of the decision on the additional issue of shares.
The decision to issue securities is developed on the basis of an already adopted decision to conduct an additional issue and contains more detailed information on the upcoming issue. As a rule, it is approved by the board of directors of the company, but in some (usually provided for by the charter) cases, these powers are transferred to the general meeting.
- Registration of an additional issue of shares.
The approved decision on the additional issue of securities is subject to state registration, which should be carried out by the Bank of Russia Service financial markets within 30 days from the date of application. The company shall attach documents to the application containing information about its economic and legal status, as well as information about the upcoming issue of shares. The list of documents provided is determined by law and depends on the type and method of placing securities, as well as on the characteristics of the company.
Registration of an additional issue of shares is invariably accompanied by the disclosure of information, on the basis of which shareholders and potential investors can judge the expediency of investments. The procedure for disclosing information is determined by the relevant provisions of the law.
In some cases, when carrying out an additional issue of shares, registration of a prospectus is required (for companies conducting an open subscription, or closed, the list of subscribers of which exceeds 500).
- Placement of additional shares.
The algorithm for the placement of shares of an additional issue is established in the decision on the issue, and, as already mentioned, in most cases it can be carried out in one of the following ways.
- New securities are distributed among the shareholders of the company in such a way that the interests and rights of the latter are fully observed.
- The placement of shares is carried out by subscription among a previously agreed circle of persons who have a priority right to purchase them. These persons are warned in writing about the available opportunity and have the right to implement it (or refuse) within the time period established by the terms of issue. This distribution is called a private subscription, and it can be carried out by both OJSC and CJSC.
With an open subscription, anyone who wishes to purchase additionally placed shares has the right to declare his intention and confirm it by depositing the required amount of funds. Public subscription can only be carried out by open joint stock companies. Usually, when it is held, the priority right of shareholders to purchase shares of a new issue is retained. - Conversion of securities into shares is carried out in accordance with the provisions of the charter and the decision on the issue.
Payment for shares of additional issue can be carried out both in cash and in non-cash form.
In the first case, the purchase of securities is carried out on the basis of a purchase and sale agreement. The second case involves the implementation of additional actions and registration of special documents determined by the procedure for registering property rights.
Term of placement of securities set in the release decision. The law defines the time limits for a subscription: it cannot last less than one month or more than one year.
In the case of distribution of securities to shareholders or conversion of shares, the term is usually not specified, since the process of re-registration of securities takes approximately one day.
- State registration of the report on the results of the additional issue of shares.
The report must be submitted to the relevant state body no later than 30 days from the date of the issue expiration, or (if the issue is completed ahead of schedule) from the date of the last share placement. Consideration of the report and making a decision on it must be carried out within fourteen days from the date of receipt of all documents.
This final stage is not difficult, but it determines the success of the entire event. Failure to submit documents prescribed by law, violation of deadlines, errors or non-compliance established rules may become a reason for refusal of registration. The refusal of the Bank of Russia Financial Markets Service to register the report will mean that the issue of securities has been declared invalid.
It is obvious that carrying out an additional issue of securities is a process that requires special legal knowledge, understanding of nuances, experience, attentive attitude, and responsibility. It is advisable to entrust its conduct to an organization dealing with issues of this kind at a professional level.
In the life of organizations and enterprises, a lot of operations take place every day, which are not always clear and transparent without appropriate education. There are operations that are carried out quite rarely under a certain set of circumstances. Each of them has a specific purpose. One of these is the additional issue of shares by a joint stock company. This article discusses the definition of an operation, its meaning, goals and methods of implementation.
What is an additional share issue
The issue of shares, it is the issue, can only be carried out in a joint-stock company. The additional issue of shares can pursue various purposes, but most often it is carried out to attract money supply in the authorized capital. For many companies, shares are the only way to build up their initial capital. With the help of these funds, the company develops, expands, innovates the workflow, and so on.
In many ways, the process of additional release is similar to the primary one, but there are also some nuances. Like all processes taking place in organizations, the emission must be properly formalized, and also registered in government bodies control.
Why carry out an additional release
An additional issue of shares may serve one of the following purposes:
- increasing the authorized capital, attracting third-party funds for development or solving problems;
- increase in the number of shareholders;
- transformation of the organization, introduction of reforms in politics.
Depending on the purpose, organizational and legal form, number of participants, a joint-stock company can choose different ways additional issue of shares. The issues are distinguished by their serial number and by the type of issued shares: convertible, preferred, ordinary, and so on. Each type of securities has its own provisions in the legislation. For example, preference shares cannot be more than 25% of the authorized capital.
Often, additional issue is made in structures such as banks, Insurance companies and others financial institutions, whose activities are strictly regulated by law. The state regularly raises the lower bar of the size of the authorized capital for them, even if there is no economic justification or crisis necessity for this. In this case, the issue of shares is carried out solely to raise the existing level own funds to the required mark.
Conditions for additional issue
Before deciding on an additional issue of shares, you must make sure that three conditions are met:
- All issues of shares of previous periods are fully completed... This means that all issued securities are fully paid, the final reports on the issue are registered, as required by the procedure, the results are considered at the general meeting of shareholders of the company and approved, and changes are made to the charter.
- The number of issued shares must not exceed that fixed in the charter of the organization. If this amount is not enough to achieve the set goals, it is necessary to approve the amendments to the charter at the general meeting of shareholders.
- The issue of additional shares by a joint stock company is possible only if the organization fully complies with the provisions of the legislation on disclosure of information.
Placement methods and stages of issue
Methods for the placement of shares of the additional issue are determined by the state. The joint stock company has three possible ways accommodation:
- distribute shares among the existing members of the company (the number of members does not change, but their shares in the capital can be redistributed);
- placement by open or closed subscription (third-party investors are attracted, the circle of participants changes, the ratio of shares changes);
- transformation of other securities of the organization into shares (the procedure for the procedure must be clearly spelled out in the charter).
The issuance procedure includes a number of sequential steps, none of which should be skipped. Additional shares are issued according to the following algorithm:
- shareholders decide on the need for an additional issue;
- the decision is approved at the general meeting or by the board of directors;
- additional issue of shares is registered;
- shares are placed among potential holders of securities;
- a release report is drawn up, then registered by the state.
In the following paragraphs, we will analyze all these stages in more detail.
Making and approving the release decision
At the decision-making stage, an analysis of the state of the company, as well as future development, is carried out. Usually these actions fall within the competence of the board of directors. The issue of the issue is brought to the general meeting in case of exceeding certain restrictions established by the state (amount, type of community, terms of placement).
The second stage - approval of the decision - is also subject to approval by the board of directors. Only in especially difficult situations is it brought up for consideration. general meeting shareholders. This stage includes more detailed studies of the situation and analytics. The idea of the issue is overgrown with specifics: indicators, conditions, and so on.
Registration of additional issue
After the decision on the additional issue of shares has been made and approved, the bank must register it. Of course, not just any bank, but the Bank of Russia Service, which oversees the financial markets.
An application is submitted to the Bank of Russia Service no later than 30 days after the approval of the decision on the issue. In addition to the document itself, it is necessary to provide a number of papers reflecting information on the legal and economic status of the company, an issue prospectus that transparently reflects calculations, analytics and other data necessary for future investors to make a decision on the advisability of investing. Other documents may be required depending on the type of joint stock company and the securities issued.
Placement of an additional issue of shares
The easiest way of placement is to distribute securities among existing shareholders. The only condition is that the rights of none of them should not be violated.
Placement by private subscription- sending offers to purchase shares to a certain circle of persons having priority in purchasing securities of this organization.
Placement by open subscription- Anyone can buy shares. The existing shareholders still have the advantage, but the auction is public.
The hardest way - conversion of securities. The features of this method should be spelled out in the charter of a particular enterprise.
Payment for securities can be made both in cash with the execution of a sale and purchase agreement, and in others, implying the execution of special documents for the transfer of ownership.
The timing of the placement depends on its method, as well as on the type of shares. If securities are placed among their shareholders, usually the timing is not stipulated. In the case of an open or closed subscription, trades last from 1 month to a year.
State registration of an additional issue of shares
Completion of the issue is also registered by the Bank of Russia Service. The report on the carried out issue of securities is submitted no later than 30 days after the placement of the last share. The service checks the report and all related documents within 14 days. After that joint stock company a verdict is issued on the results of entry into the register.
Registration of additional share issues is not just a formality. Civil servants will thoroughly study all Required documents for compliance legislative regulations and regulations. If during the inspection a violation is revealed existing regulations, the organization may be subject to sanctions. Depending on the severity of the violations, the additional share issue may even be invalidated.
The procedure for the issue (issue) of shares, approved by the Bank of Russia on August 11, 2014 428-P, includes the stage of making a decision on their placement. The decision to issue shares through an open or closed subscription is necessary when establishing a joint-stock company, increasing or decreasing the authorized capital, converting some securities into others, and in some other situations.
The decision must be prepared in a special form, established by the Bank Russia (Appendix No. 10 to the "Regulations on the standards for the issue of securities, the procedure for state registration of an issue (additional issue) of emissive securities, state registration of reports on the results of the issue (additional issue) of emissive securities and registration of securities prospectuses" (approved by the Bank of Russia 11.08.2014 N 428-P)). In case of successful registration of the issue of securities, the applicant is issued with two copies of the decision on the issue of securities with a mark on its registration and state registration number (clause 5.13 of the Regulations).
Content of the decision on the issue (additional issue) of shares
The document contains:
- the name of the issuer;
- information about shares, their category, form, par value and quantity, method of placement;
- the name of the issuer's governing body that approved the decision on the issue of shares;
- information about the document (date, protocol details);
- details of the agreement on the establishment of a joint stock company;
- location and contact details of the issuer;
- the initials of the head, his signature and the date of signing.
What you should pay attention to when registering
The decision on the additional issue of shares must be approved by the board of directors of the company. If the board of directors is not elected and the number of shareholders is less than fifty, the document may be approved by the GMS. At the same time, the charter should provide that the functions of the Board of Directors can be performed by the OCA.
The rights granted for each share must comply with the charter of the joint-stock company.
The document must be signed by the sole executive body ( director general). If the company has a seal, then the decision must be certified by the seal.
All pages of the decision to issue shares of a bank or other organization must be filed and numbered.
