📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

    Question

    Under Section 53 of the Companies Act 2013, companies

    are not allowed to issue shares at a discount. What are the exceptions allowed to this section? 
    A Issue of Bonus share which are issued at zero cost Correct Answer Incorrect Answer
    B Issue of Rights shares given at discount to existing shareholders Correct Answer Incorrect Answer
    C Issue of shares at discount to the creditors as part of debt restructuring scheme Correct Answer Incorrect Answer
    D Issue of shares on exercise of ESOPs by employees Correct Answer Incorrect Answer
    E All of the above Correct Answer Incorrect Answer

    Solution

    Section 53.Prohibition on issue of shares at discount - (2A) Notwithstanding anything contained in sub-sections (1) and (2), a company may issue shares at a discount to its creditors when its debt is converted into shares in pursuance of any statutory resolution plan or debt restructuring scheme in accordance with any guidelines or directions or regulations specified by the Reserve Bank of India under the Reserve Bank of India Act, 1934 or the Banking (Regulation) Act, 1949

    Practice Next
    More Financial Management Questions
    ask-question