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the common law rule to prevent the company to issue share at discount to nominal value is given statutory effect in CA 06.in addition CA06 states that shares are only treated as paid up to the extent that the company has received money or money worth.
if this rule is breached the issue is still valid,but the allotee must pay up the discount plus interest.this applies to any subsequent holder of such a share who was aware of the original underpayment
mike please explain this rule and its effect when breached and why allotee pay interest and discount
Because issuing shares at a discount is against the law so if a company issues 100 $1 shares to you and you only pay $40, then you remain liable for the other $60 plus interest on that $60