Dear Sir/Madam,
In a Pvt Ltd company AOA doesn't mention anything about share valuation method. So whether during share transfer or fresh issue, can the MD of the concern choose whatever the price for the share he/she wants? Can he/she transfers his/her share or issue new shares in higher price than the face value? For example, in the beginning a company issued 50,000 shares at the rate of Rs. 10/- each. So the total paid up capital is Rs. 5,00,000. After one year, the MD of the concern wants to raise another Rs. 5,00,000/- by issuing shares to his/her existing share holders. And the existing shareholders are also willing to buy share at any price, and the board also agreed. So here can the MD choose the value of the share by his/her own. Like he/she fix Rs. 100 per share. So 5000 share * Rs. 100 = 5,00,000. Can the MD do like this or not?
CAclubindia
