Frequent question: What type of shares can be issued at discount?

Can shares be issued at discount *?

(1) A company shall not issue shares at a discount except as provided in this section. … (iv) the shares to be issued at a discount are issued within two months after the date on which the issue is sanctioned by the 3 Company Law Board] or within such extended time as the 3 Company Law Board] may allow.

Which shares Cannot be issued at discount?

1) Except as provided in section 54, a company shall not issue shares at a discount. (2) Any share issued by a company at a discounted price discount shall be void.

Can a company issue shares at discount explain?

Definition and Explanation

It is lawful for a company to issue shares at a discount if several conditions are met. The first condition is that the issue of the shares at a discount must be authorized by a resolution passed at the company’s general meeting, and it must be sanctioned by the authority.

Can a company issue shares to public at a discount Why?

(1) Except as provided in section 54, a company shall not issue shares at a discount. (2) Any share issued by a company at a 1[discount] shall be void.

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Why shares should not be issued at discount?

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.

Which shares Cannot be issued by the company?

B Ltd. was registered with a share capital of Rs. 2,00,00,000 divided into equity shares of Rs. 10 each.

Can shares be issued at a premium and at a discount?

A company can issue its shares either at par, at a premium or even at a discount. … Shares sold at a premium cost more than their nominal value, and the amount in excess of the face value is the premium. And of course, shares sold at discount cost less than the face/nominal value.

What is share discount?

A share discount occurs when the market value of a share falls below its par value. The par or nominal value of a share is an arbitrary figure which is set when a share is first sold or issued. It usually has little or no significance because shares usually trade far above par value. …

Which is one of the circumstances shares may be issued at a 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. Not less than 1 year has at the date of issue elapsed since the date on which the company became entitled to commence business.

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