AO's charter capital is made up of the nominal value of its securities. The issue of shares and their placement is carried out directly at the establishment of the company (among its participants), as well as in the case of a decision to increase the authorized capital with the help of additional shares (or when other securities are converted into them).
Securities such as shares confirm the right of holders to a share in the capital of the company, as well as all the rights arising from this (management, receipt of part of the profit, disposal of shares, etc.). They are perpetual documents that stop circulation only when their issuer leaves the market.
The issue of shares is a necessary measure that most companies resort to in cases where they need additional funds for development. This is the best alternative to loans and finding investors.
Issue of shares - the issue
of securities, carried out in a strictly regulated manner by law. The regulation of the procedure at the state level is carried out in order to protect investors from possible dishonesty of issuers.
It is possible to conduct several issues of shares: ordinary and preferred (with a nominal value of not more than 25% of the authorized capital).
An additional issue of shares is accompanied by amendments to the Charter. Its main stages are: making a decision on the issue, registering the issue, making certificates (with the documentary form of issue), direct placement of securities and further registration of the report on the results of their issue.
If the number of shareholders exceeds 500 (or the total value of the shares is more than 50 thousand minimum wages), it will be necessary to register the issue prospectus (in this case, the issue is considered public).
An additional issue of shares is a complex and highly regulated procedure that requires extremely transparent reporting and transparency of information about the issuer.
When registering an issue, the issuer's obligations are agreed (in writing), and the license plate is assigned to the entire issue. In a public offering, a company is required to provide investors with free access to the information they need. At the same time, the company must publish activity reports (quarterly reports of the issuer with data on financial condition). The placement of shares may begin only after the registration is completed.
The decision on the additional issue is taken by absolutely all participants of the enterprise at the general meeting of shareholders.
The scope of rights granted to the holder of a share depends on whether it is ordinary or privileged. Dividend payments are directly proportional to the financial results of the company for the year. The company has the right to decide on non-payment of dividends, instead directing profits to the development of production.
The issue of shares contains risks, because the issuer may make mistakes in calculations, as a result of which additional securities will not be placed (they will not be bought by potential investors), which will reduce the value of already quoted shares.