Issue of shares at a premium by private company
This query is : Resolved
30 July 2009
Can a private company issue shares at a premium? Is there any justification required?
Ankur Garg
(Expert)
30 July 2009
Yes it is very much possible.
A private company can issue shares at a premium. No justification required.
Regards
A private company can issue shares at a premium. No justification required.
Regards
30 July 2009
Thanks, is it possible to issue the shares at a premium by a private limited company even if it a newly formed company?
Ankur Garg
(Expert)
30 July 2009
Yes. It is also very much possible.
It is possible to issue the shares at a premium by a private limited company even if it a newly formed company.
However, issue of shares on discount is not possible for a newly formed company as per section 79.
Rrgards
It is possible to issue the shares at a premium by a private limited company even if it a newly formed company.
However, issue of shares on discount is not possible for a newly formed company as per section 79.
Rrgards
30 July 2009
thanks, yes i am aware of Sec. 79. If I may take this further, for the purpose of reduction of share capital, share premium account is to be considered as 'share capital', now if the authorised capital is say 5,00,000, issued cap is also 5,00,000, and share premium is say 2,00,000, is this a problem, for the total of issued cap + share premium is 7,00,000 which is more than auth cap or is it plain auth cap and issued cap, and share premium is only to be theortically reckoned when the question of incorrect usage is brought up?
28 March 2011
In case of a private company having debit balance of P & L (i.e. brought forward losses), how can issue of shares at premium (10+290) be justified.
Secondly what can be the legal repircation if a company issues shares at premuim despite having loss.
One important point here is that post issue at premium the net balance in reserve and surplus gets converted from debit balance to credit balance.
Secondly what can be the legal repircation if a company issues shares at premuim despite having loss.
One important point here is that post issue at premium the net balance in reserve and surplus gets converted from debit balance to credit balance.
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Praveen Sharma
(Expert)
11 September 2013
Can securities Premium be received in Cash??
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