Your question: What are the provisions relating to issue of shares at a discount under the Companies Act?

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.

What are the provisions regarding Issue of Shares at discount?

79. Power to issue shares at a discount. (1) A company shall not issue shares at a discount except as provided in this section. (i) the issue of the shares at a discount is authorised by a resolution passed by the company in general meeting, and sanctioned by the 1 Company Law Board];

Section 56 of the Act stipulates that the company is supposed to issue share certificates to subscribers to memorandum within two months of incorporation which casts a responsibility upon subscribers to make the payment for the shares subscribed by them within two months.

What are the provisions of Companies Act?

Incorporation of a company is governed by the provisions laid out in the Companies Act 2013, which defines a company as an association of persons formed for the purpose of doing business. A company has a separate legal entity distinct from its members who constitute it.

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Which type of shares are issued at discount?

Also, debentures and bonds are allowed to be issued at discount as only shares apart from sweat equity shares is allowed for discount.

Which shares Cannot be issued at discount?

A company cannot issue shares at a discount because the loss due to the discounted price is barely managed by any company.

What rights are given in case of right issue?

The issue is called so as it gives the existing shareholders a pre-emptive right to buy new shares at a price that is lesser than market price. The Rights issue is an invitation to the existing shareholders to buy new shares in proportion to their existing shareholding.

What are the special provisions governing allotment of shares?

According to Section 69(1) of the Companies Act, no allotment can be made by the company until the minimum Subscription has been received. In accordance with Section 69(3), the amount payable on each share should not be less than 5 per cent of the Nominal Value of the shares.

Which company is exempted from holding AGM?

A company can be exempted from holding its AGM if it sends its financial statements to all persons entitled to receive notice of general meetings of the company within 5 months after the FYE or it is a Dormant Relevant Company which is exempted from preparing financial statements.

What are the main provisions of Indian company Act 2013?

Key Highlights of Indian Companies Act 2013

  • The maximum number of members (shareholders) permitted for a Private Limited Company is increased to 200 from 50.
  • One-Person company.
  • Section 135 of the Act which deals with Corporate Social Responsibility.
  • Company Law Tribunal and Company Law Appellate Tribunal.
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Following is a list of all such required compliances under Companies Act, 2013:

  • Verification of Registered Office. …
  • Display company information. …
  • First Board Meeting. …
  • Appointment of auditor. …
  • Share Certificate Issuance. …
  • Disclosure of interest by Directors. …
  • Maintenance of Minutes. …
  • Maintenance of Statutory Registers.
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