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Qualification Shares ...Query?

(Guest)

1)The Nominal Amount of Qualification shares shall not exceed rs 5000.
2)Where nominal amt of one share exceeds rs 5000,Share qualification shall be holding of one share only.

If a director is newly appointed & market value of the shares wen he buys , Qualification shares is rs 1000 per share and face value is rs 10.Which should we consider here for nominal amt rs 10 or rs 1000.ie he has to buy maximum of 5 shares of 1000 each or 500 shares of 10 each.?
My query is regarding "nominal amt".Does it consider nominal value/face value of shares or market value?
Thanx in advance.

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13 Replies

Ankit CA and CS (Manager - Accounts) (204 Points)
Replied 09 May 2010

Face value is to be considered.... Nominal Value means face value

1 Like

vikash rathi (Chartered Accountant) (787 Points)
Replied 09 May 2010

nominal value means face value.....

1 Like

Prasanth Nair V (ACA,ACS,CWA Final,Mcom) (557 Points)
Replied 09 May 2010

Here in this Case, nominal value means Face Value, and here in any case market value is not considered, for Qualification shares.

1 Like

(Guest)

agree with all of the above........

1 Like

Rahul Gupta (CA Final Student) (1780 Points)
Replied 09 May 2010

Hi. Nominal value means face value. It is no case means market value or even paid up value. It is the face value which is used for the purpose of calculation of qualification shares.

1 Like

ca students (student) (32 Points)
Replied 10 May 2010

Agreed with all of the above..

1 Like

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 10 May 2010

Hello,

In your case director has to buy maximum of 5 shares of 1000 each to maintain the compliance of section 270. Try and understand the logic behind using Rs. 5000 in section 270.

Rs. 5000 cannot be face value of one share. Hope now you can understand the intention of law.

Best Regards

1 Like

(Guest)

To Ankur Sir,

Sir if u read my example i ve mentioned face value as Rs10 each .As answered by all people here we should consider Face value/nominal value.thus i think it should be 500shares of 10 each not 5 shares of 1000each(as mentioned by u) or in other words the director can buy maximum of 500 shares irrespective of market price.Please correct me if i ve mistaken .

Best Regards.

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 11 May 2010

Originally posted by : Chartered Accountant Student
	To Ankur Sir, Sir if u read my example i ve mentioned face value as Rs10 each .As answered by all people here we should consider Face value/nominal value.thus i think it should be 500shares of 10 each not 5 shares of 1000each(as mentioned by u) or in other words the director can buy maximum of 500 shares irrespective of market price.Please correct me if i ve mistaken . Best Regards.

You are right as concept kisi ka bhi hil sakta hain.

I need to re-analyse my answer keeping in view the answers of other learned members. So i'll get back to you as early as possible.

Thanks

(Guest)

Ok sir ill be waiting..

Thanx.

Nitin Grover (CS) (1228 Points)
Replied 12 May 2010

Dear Friends

Yes their is rule for acquiring shares for qualification of shares is maximum of shares of rs 5000/- or if amount is higher then only one share or if two shares are making value is rs more than 5000 then also 1 share like

Price of one share is 2600 then only one share.

and Nominal Value is Face Value

Regards

1 Like

(Guest)

@ Nithin Grover,

Considering my example given wats the answer?ur post has again confused me.

Best Regards

Nitin Grover (CS) (1228 Points)
Replied 12 May 2010

Dear Friend the entire message also for clarification of Mr. Ankur Garg pls see last line its for you dear and yes Nominal Value will be Rs. 10/- For further clarification pls see Form 2 and fill amount it will clear ur doubt abt Nominal Value Dear Nominal Value does not contain Premium amount Regards