Confused, Can a company issue shares at discount under companies Act 2013 or not as per the syllabus of class 12 CBSE, ISC, and state Board.
In general, a company can not issue shares at discount to the general public. But in certain cases, the company can issue shares at discount as sweat equity shares.
Why Company can not issue shares at discount under companies act 2013
As per Section 53 of the Companies Act 2013, Companies would no longer be permitted to issue shares at a discount.
In which case a company can issue the shares at discount?
The only shares that could be issued at a discount are sweat equity wherein shares are issued to employees or directors in lieu of their services under Section 54 of the 2013 Act.
Why do companies issue shares at discount?
Companies issues shares at discounts to their talented employees to make them stay longer in the company.