Question

Which of the following statements is correct with respect to reissue of forfeited share?

Options

• It cannot be reissued at discount.

• It can be reissued at a maximum discount of 10%.

• It cannot be reissued for an amount less than the amount not received.

• It can be reissued at the discretion of the company.

Answer 1

It cannot be reissued for an amount less than the amount not received.

Explanation:

Forfeited shares may be reissued at par, premium or discount. However, the discount on reissue cannot exceed the amount forfeited on those shares. Therefore, the reissue price cannot be less than the amount previously unpaid.