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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA LW Exams › Inadequate consideration and Private company
Sir, as we know that Private company can issue shares for inadequate consideration by acceptance of good or services at an overvalue . However, can private company also issue shares by acceptance of good or services at an undervalue?
If it can, then in such a case consideration received by private company would be adequate or would it be inadequate?
“However, can private company also issue shares by acceptance of good or services at an undervalue?”
Yes, why not?
Receive goods or services with a fair value of $600 but valued for the purposes at $500 and issue 350 $1 shares ($350 share capital and $150 share premium)
OK?