When shares are issued at par premium and discount?

What is shares 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.

When shares are issued at premium then premium is?

A company issues its shares at a premium when the price at which it sells the shares is higher than their par value. … The amount of the premium is the difference between the par value and the selling price. If shares do not have a par value, then there is no premium.

When can shares be issued at a 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.

What is issue of shares at discount?

The issue of shares at a discount means the issue of the shares at a price less than the face value of the share. For example, if a company issues share of Rs. 100 at Rs. 90, then Rs. 10 (i.e. Rs 100—90) is the amount of discount.

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What do you mean by issued at par?

When a company issues a new bond, if it receives the face value of the security the bond is said to have been issued at par. If the issuer receives less than the face value for the security, it is issued at a discount.

Can shares be issued at discount in India?

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.

What is the issue of shares at premium?

The issue of shares at premium refers to the issue of shares at a price higher than the face value of the share. In other words, the premium is the amount over and above the face value of a share. … For example, if a company issues a share of nominal or face value of ₹10 at ₹11, it issues it at 10% premium.

When a company issues shares at a premium the amount of premium should be received by the company?

Therefore, When a company issues shares at a premium, the premium amount will be received by it along with application money, allotment money, or calls.