- This topic has 1 reply, 2 voices, and was last updated 7 years ago by
.
- Posts
Sir can you please explain me the following paragraph:
” In public company, independent valuation is required for non cash consideration within 6 months of the transaction. If non cash consideration is tangible asset then it must be received by company within 5 years of the allotment of shares. An undertaking to do work or perform service is not to be accepted as consideration, however, shares can be issued to discharge debt in respect if services already performed.”
Public companies, if they intend to issue shares in exchange for non-cash consideration (so tangible or intangible assets, but not cash) must have an independent valuation on that asset to ensure that the shares are not going to be issued at a discount
The asset must be transferred to the company within the five years immediately following the share issue and the independent valuation should be no more than six months before the share issue
Shares may not be issued in exchange for a promise but may be issued in exchange for last services received
OK?
- The topic ‘Non cash consideration for shares Public company’ is closed to new replies.