Equity Shares/ Preference Shares / Debentures

What cannot be issued at a discount ?
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Quick Summary
This discussion clarifies the rules around issuing shares and debentures at a discount. While the Companies Act 2013, specifically Section 53, prohibits the issuance of shares (both equity and preference) at a discount, it's important to note that this prohibition does not explicitly extend to debentures. Penalties for violating this rule are severe, including voiding the issue and requiring refunds with interest.

I'll take a chance, all three of them can be issued at discount

s.53 of Companies Act 2013 allows Company for issue of shares at a discount.

S.53 of the Act

It clearly prohibits the issue of shares at discount as it states in its clause (2) that any share (which means either equity share or preference share) issued by a company at a discounted price shall be void.

It also provides in its clause (3) for penalty, to a company or officer in default, an amount equal to the amount raised through such issue of shares at discount or five lakh rupees, whichever is less. The company shall also be liable to refund all monies received with interest at 12% p.a from date of issue of such shares to the persons to whom such shares have been issued.

iPleaders Blog - Can Shares be issued at a Discount? When?

This is the difference between law and accounting

I think section 53 of the companies act 2013 prohibites , please refer section .
Ok thanks

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