Shares
What are the conditions for issuing shares at discount?
By  Alankrita Singhal  |  11 Mar 2016  |  Upvotes: 0  | 

1 Answer(s)

Deepika Gill
Advocate

There are a few mandatory conditions that a company must meet before issuing shares at discounts. This is done to ensure that the discount is reasonable and fair.

Here are some of the conditions: -

Class Already Issued: The shares to be issued at a reduced price must belong to a class of shares that has already been issued.

-Seek Authorization: A resolution shall be passed in the general meeting of a company to authorize the issuing of shares at discount. It shall also be approved by the Company Law Board.

-At Least One Working Year: A company can issue shares at discount only if it has been functioning for a minimum period of one year from the date it was entitled to begin business transactions.

-Issue Shares Within 2 Months: The company shall issue shares at discount within two months from the date of approval by the Company Law Board.

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