What type of equity share can be issued at discount?

As per companies Act 2013, a company shall not issue shares at a discount except as provided in section 54 for issue of sweat equity shares. Any share issued by a company at a discounted price shall be void.

Can we issue equity shares at 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 1[discount] shall be void.

Which shares Cannot be issued at 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.

When can shares be issued at 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.

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In which case a company can issue the shares at discount?

[(2A) Notwithstanding anything contained in sub-sections (1) and (2), a company may issue shares at a discount to its creditors when its debt is converted into shares in pursuance of any statutory resolution plan or debt restructuring scheme in accordance with any guidelines or directions or regulations specified by …

Can right shares be issued at discount?

A rights issue is an invitation to existing shareholders to purchase additional new shares in the company. This type of issue gives existing shareholders securities called rights. With the rights, the shareholder can purchase new shares at a discount to the market price on a stated future date.

What is share discount?

Definition: A discount on stock occurs when the stock’s par value is higher than the issuing price. The difference between the greater par value and the lesser issue price is considered the discount. This represents the amount of the par value that investors were unwilling to pay for when the stock was issued.

Why shares are listed at discount?

A stock typically gets a good listing if the response of all the 3 segments of the IPO investors; retail, non-institutional and QIB to be robust. … Aggressive pricing of the IPO This is one of the most common reasons for an IPO listing at a discount to the issue price.

Can sweat equity shares be issued at discount?

Sweat equity shares can only be issued by a company to its Directors or Employees, at a discount or for a consideration other than cash, for their providing of know-how or creation of intellectual property rights like trademark, patent, copyright or value additions.

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Why discount on issue of shares is an asset?

Hence, the discount on issue of shares should be charged to profit over the period. Until the discount is completely written off, it still exists in the books of accounts and since all losses have debit balance, it is shown under Asset Side of the Balance Sheet (this loss is a fictitious asset for the company).

Who issue shares on discount means?

ADVERTISEMENTS: When Shares are issued at a price lower than their face value, they are said to have been issued at a discount. For example, if a share of Rs 100 is issued at Rs 95, then Rs 5 (i.e. Rs 100—95) is the amount of discount. … It is debited to separate account called ‘Discount on Issue of Share’ Account.

When shares are issued at par premium and discount?

When shares are issued at a price equal to their face value it is termed as shares issued at par. When issue price of a share is more than its face value, it is known as shares issued at a premium. If issue price of a share is less than its face value, it is called as shares issued at a discount.

Can shares be issued at discount for consideration other than cash?

When shares are issued against the purchase price, it is called ‘Issue of shares for consideration other than cash’. … In other words cash is not received by the company against such shares. In this case shares are not issued to the public in general.

What will be the journal entry for shares re issued at discount?

When shares are reissued at a discount, the bank account will be debited by the amount received and the share capital account is credited by paid up amount. The discount allowed will be debited to share forfeited account. Bank A/c (the amount received on reissue) Dr.

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