State, whether the following statements is True or False. A public co

1.	State, whether the following statements is True or False. A public company can issue shares at only rate of discount. Options TrueFalse
Answer» False Explanation: Shares can be issued at a discount by public or private companies, subject to a few conditions (as per Section 79 of Companies Act, 1956) that are mentioned below: ➢ Shares to be issued at a discount must be of an existing class already issued, i.e. a new class of shares cannot be issued at a discount. ➢ Shares issued at a discount must be authorised by the resolution passed in the general meeting of a company and approved by SEBI. ➢ The resolution should specify the maximum rate of discount (not exceeding 10%). ➢ At least one year should have elapsed since the company commenced business. ➢ After the permission of SEBI, the shares to be issued at a discount should be issued within two months.

State, whether the following statements is True or False. A public company can issue shares at only rate of discount. Options TrueFalse

Answer»

False

Explanation: Shares can be issued at a discount by public or private companies, subject to a few conditions (as per Section 79 of Companies Act, 1956) that are mentioned below:

➢ Shares to be issued at a discount must be of an existing class already issued, i.e. a new class of shares cannot be issued at a discount.

➢ Shares issued at a discount must be authorised by the resolution passed in the general meeting of a company and approved by SEBI.

➢ The resolution should specify the maximum rate of discount (not exceeding 10%).

➢ At least one year should have elapsed since the company commenced business.

➢ After the permission of SEBI, the shares to be issued at a discount should be issued within two months.

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