When can a company issue shares at a discount?

(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.

Can company issue shares at a 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.

Why do companies issue shares at discount?

Introduction to Issue of Shares at Discount

Shares tempt the investors also because it can give huge profits to them unlike the fixed rate of return on debentures. There are various ways or prices at which a company issues its shares like at par, at a premium and at discount.

What type of share can be issued at discount?

The sweat equity shares mean shares issued by a company to its directors or employees for non-cash consideration or at a discount for making rights available in the nature of intellectual property rights or providing know-hows or any providing any value additions in any form.

Why are shares issued 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.

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

Section 53 of Companies Act, 2013 – Prohibition on Issue of Shares at Discount. (1) Except as provided in section 54, a company shall not issue shares at a discount.

Which section of Companies Act prohibits issue of shares at discount?

Section 53 of the Companies Act, 2013: Prohibition on issue of shares at discount.

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.