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Issue of shares at a premium by private company

This query is : Resolved 

Can a private company issue shares at a premium? Is there any justification required?

Yes it is very much possible.

A private company can issue shares at a premium. No justification required.


Thanks, is it possible to issue the shares at a premium by a private limited company even if it a newly formed company?

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.


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?

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.

Can securities Premium be received in Cash??

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