Best answer: Can a company issue share at discount?

The companies can issue the shares at a discount subject to the following conditions: The issue must be of a class of shares already issued. … The shares to be issued at a discount must be issued within two months of the sanction by the company law board or within such extended time as the company law board may allow.

Can a company issue shares at discount under Companies Act 2013?

The Section 53 of the amended Companies Bill states, “a company may issue shares at a discount to its creditors when its debt is converted into shares in pursuance of any statutory resolution plan or debt restructuring scheme.” Earlier provision under Section 53 of Companies Act 2013 said, “Any share issued by a …

Can a company issue shares at discount what conditions must a company comply with before the issue of such shares?

Conditions to Issue Share at Discount: Shares can be issued at discount subject to the following conditions: (a) The shares must belong to a class already issued. (b) Discount rate should not be more than 10%.

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Why is issuing shares at discount illegal?

Discounted prices may be offered when company is not able to pay its debts and offering it share to its creditors. Company Act 2013 strictly prohibited the companies to issue shares at discounted price. It invites penalty and imprisonment for directors. … So never think of discounted price.

Can a company issue shares at premium?

All types of companies can issue their shares at premium. As per the provisions of Section 52 of the Companies Act, 2013 a company can issue shares at a premium, whether for cash or otherwise.

What is discount on issue of share?

The issue of shares at a discount means the issue of the shares at a price less than the face value of the share. For example, if a company issues share of Rs. 100 at Rs. 90, then Rs. 10 (i.e. Rs 100—90) is the amount of discount.

Can a company issue a share having face value of Rs 10 at Rs 9?

No. Under Section 53 of the Companies Act, 2013, a Company cannot issue shares at discount.

Under which condition company can issue share at discount?

A company can issue shares at discount atleast after one year from the date of commencing business. 5. If a company wants to issue shares at discount, then it must issue them within two months of obtaining sanction from the Company Law Tribunal.

Which type of shares are issued at discount?

Also, debentures and bonds are allowed to be issued at discount as only shares apart from sweat equity shares is allowed for discount.

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Which shares Cannot be issued at discount?

A company cannot issue shares at a discount because the loss due to the discounted price is barely managed by any company.

Can forfeited shares be issued at discount?

Forfeited shares can be reissued at a discount.

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