Issue of shares at premium to promoters

Dear Ashish Sir

Yes, the subscribers can be issued shares at a premium at the time of incorporation.

But you cannot have differential pricing/premium among subscribers.

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There is no specific provision in the Companies Act for allowing or prohibiting issue of shares to the subscribers at premium.  However, if shares are to be issued at premium, subscribers will have to disclose amount of premium in the undertaking to be given by them.  If we go through Form of Memorandum of Association of a company limited by shares given in Table B of Schedule-I to the Act, we find that the undertaking by subscribers gives only number of shares and there is no provision for amount of premium.  If we insert a column of amount of premium, ROC may not accept the same since it is not prescribed in the Act.  Even otherwise, logically question of premium should come only after the company has come into existence and undertaken some activitiy.  Hence in my view shares should not be issued to subscribers at premium.

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