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    Question

    Section 53 of the Companies Act, 2013 does not allow

    issue of shares at a discount. Which of the following category of shares can be issued at a discount by a company, nonetheless?
    A ESOPs Correct Answer Incorrect Answer
    B DVR equity shares Correct Answer Incorrect Answer
    C Rights issue shares Correct Answer Incorrect Answer
    D Sweat equity shares Correct Answer Incorrect Answer

    Solution

    Section 53 of Companies Act, 2013 – Issue of shares at a discount Issue of shares at a discount NOT ALLOWED. If shares issued at discount, they will be considered void Exceptions : issue of sweat equity shares shares issued at discount to creditors when its debt is converted into shares in pursuance of any statutory resolution plan or debt restructuring scheme as per RBI guidelines Penalty in case of non-compliance company and every officer who is in default shall be liable to a penalty = amount raised through the issue of shares at a discount or Rs.5 lakh whichever is less, and company shall also be liable to refund all monies received with interest at the rate of 12% pa from the date of issue of such shares to the persons to whom such shares have been issued

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