LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Issue of shares a nominal value

sunil (Manager Finance) (29 Points)

11 September 2011

I would like to know whether a unlisted Pvt Ltd Company can issue further shares to its existing shareholders at nominal value Rs.10/- per share.

at present 100% share are holded by a foreign company.

and that foreign company wants to infuse further capital

Can the Pvt Ltd co issue it at nominal value or at share premium after the valuation of shares.

Reply
Follow
Share

1 Replies

Prakash (Chartered Accountant) (560 Points)
Replied 11 September 2011

Firstly--there no question of listing for Private Company, so it just a Private Company

Need further details regarding your case

I do deal with some assumptions

First, if the company requires funds and wish to raise it through capital, it can allot further shares but not at Nominal Value, Valuation of existing shares should be done and allot at present value of Share to the extent permitted by Authorised capital

Secondly, Company not require any funds but wish to increase No of shares to eisting shareholders, you can go for Bonus issue, it is done out of free reserves of comapny, Means Capitalisation of Profits at nominal value only