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Dear sir,
Can a company issue shares at discount?could plz explain the reasons to the answers.plz kindly reply the answer.
thank u!!
“Can a company issue shares at discount?” No, it’s against the law
“could plz explain the reasons to the answers.” It’s against the law!
No, that is also against the law. However …… a company is legally able to take a non-cash asset in exchange for shares being issued and, for a private company only, there is no requirement to have that non-cash asset independently professionally valued.
So, in an extreme case, I could transfer a spare waste bin that I no longer need to a private company and, in exchange, receive 100 £1 ordinary shares credited as fully paid. Then the company would probably want to impair that waste bin down from its recorded value of £100 to a more realistic value of, say, £3
What no company can do, neither public nor private, is issue shares purely for a cash consideration where the amount received (or acknowledged as due to be received) is less than the nominal value
OK?
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