Which type of shares can be issued at discount?

Which shares can be issued at discount?

Shares can be issued at discount subject to the following conditions: (a) The shares must belong to a class already issued. (b) Discount rate should not be more than 10%.

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.

Who issue shares on discount means?

The issue of shares at a discount means the issue of the shares at a price less than the face value of the share. … The issue of Share at Discount is always below the Nominal Value (NV) of the shares. The company debits it to a separate account called ‘Discount on Issue of Share’ Account.

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.

Why shares should not be issued at discount?

Discounted prices may be offered when company is not able to pay its debts and offering it share to its creditors. Company Act 2013 strictly prohibited the companies to issue shares at discounted price. It invites penalty and imprisonment for directors. … So never think of discounted price.

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What is issue of shares 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.

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).

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.