ISSUE OF SHARES AT DISCOUNT

ISSUE OF SHARES AT DISCOUNT

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When a company issues a share at a price lower than its nominal or par value, the shares are said to have been issued at a discount. According to sub-section (1) of section 79, if any company proposes to issue any shares at a discount, it can do so only if the conditions stipulated in this section are fulfilled. The said conditions are as follows:

1. The shares to be issued are of a class which has already been issued by the company. Therefore, the first issue of shares of a company cannot be at a discount.

2. The issue is authorised by an ordinary resolution passed by the company at a general meeting.

3. The Company Law Board has sanctioned the issue.

4. The ordinary resolution specifies the maximum rate of a discount at which the shares are to be issued. [Company Law Board shall not sanction a discount of more than ten per cent unless it is of the opinion that a higher percentage of a discount is justified in the special circumstances of the case].

5. The issue is made after one year from the date on which the company became entitled to commence business. [In the case of a private company, the date of incorporation of the company will be taken as the date of commencement of business].

6. The shares are issued within two months of the sanction by Company Law Board or within such extended time as it may allow.

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Ngo Registration Procedure Ngo Registration Office Ngo Registration With UN Ngo Registration Nagpur Ngo Registration Office In MP Ngo Registration Portal Ngo Registration Sri Lanka Ngo Registration Details Ngo Registration Guidelines Ngo Registration List Ngo Registration Consultant Ngo Registration Bureau How To Registration Ngo In India Family Trust Registration Trust Registration Trust Registration Formalities Trust Registration Office In Mumbai Trust Registration Under Income Tax Act Youth Sport Trust Registration Duties of Trustee Public Trust Registration Trust Registration Documents Trust Registration Office In Maharashtra Trust Registration Rules What Is Trust Registration

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