Question

State any three conditions for the issue of shares at discount.

Answer 1

Section 79 of the Companies Act, 1956 provides for following conditions for the issue of shares at discount:

1) A company can issue shares at discount provided it has previously issued such type of shares

2) The issue of shares at discount is authorised by resolution passed by the company in its general meeting and sanction obtained from the Central Government.

3) If the company wants to issue shares at discount, then it must issue them within two months of obtaining sanction or within extended timeline as permitted by the Central Government.