New Enroll for RBI, PFRDA & NABARD Intro Class! April 18 at 9:15 PM

    Question

    According to the Companies Act, which of the following

    statements accurately describes the rules regarding the issuance of shares at a discount?
    A A company may issue shares at a discount if it complies with specific provisions set out in section 54, otherwise, such shares are void Correct Answer Incorrect Answer
    B Shares issued by a company at a discount are always valid unless they are specifically prohibited by the company’s articles of association Correct Answer Incorrect Answer
    C A company can issue shares at a discount provided that the discount is within a prescribed limit set by regulatory authorities Correct Answer Incorrect Answer
    D Shares issued by a company at a discount are considered void, with no exceptions allowed under any circumstances Correct Answer Incorrect Answer
    E Except as specified in section 54, shares issued at a discount are invalid, and any issuance at a discount is automatically void regardless of the circumstances Correct Answer Incorrect Answer

    Solution

    Section 53. Prohibition on issue of shares 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 discount shall be void.

    Practice Next