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Issue of Shares at Discount

    IndianMoney.com Research Team | Wednesday, April 15,2009, 10:13 AM
 

A company may issue shares at a discount i.e. at a value less than its par value. The following conditions must be pleased in connection with the issue of shares at a discount :

  • The shares must be of a group already issued
  • Issue of the shares at discount must be authorized by declaration passed in the general meeting of company and sanctioned by the company law board.
  • The resolution must also indicate the maximum rate of discount at which the shares are to be issued.
  • Not less than one year has elapsed from the date on which the company was entitled to start the business.
  • The shares to be issued at discount must issued within 2 months after the date on which issue is sanctioned by the company law board or within extended as may be permitted by the Company Law Board.
  • The discount must not go beyond 10 percent unless the Company Law Board is of the opinion that the higher percentage of discount may be allowed in special circumstances of case.

IndianMoney.com Research Team

The research team at IndianMoney.com comprises of certified and experienced professionals who share the company's vision to make every Indian financially literate by equipping every Indian with right and unbiased advice. IndianMoney.com research team provides newsletters, articles, videos and FAQs on various financial products and concepts only to help you make wise financial decisions.

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