Issuance of Shares At Discount

What Are The Conditions For Issuing Shares At Discount?

Answer (1)

Team Legistify

  • Sector-1, Noida

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.

Answered on 28 Sep 2018


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