What is Prohibition on issue of shares at discount What is the procedure for Issue of sweat equity shares Section 53 and 54 of Indian Companies Act 2013

Prohibition on issue of shares at discount and Issue of sweat equity shares are defined under Section 53 and 54 of Indian Companies Act 2013. Provisions under these sections are:

Section 53 of Indian Companies Act 2013 "Prohibition on issue of shares at discount"

(1) Except as provided in section 54, a company shall not issue shares at a discount.
(2) Any share issued by a company at a discounted price shall be void.

Punishment for violation of Section 53

(3) Where a company contravenes the provisions of this section, the company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees and every officer who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees, or with both.

 

Section 54 of Indian Companies Act 2013 "Issue of sweat equity shares"

(1) Notwithstanding anything contained in section 53, a company may issue sweat equity shares of a class of shares already issued, if the following conditions are fulfilled, namely:-

(a) the issue is authorised by a special resolution passed by the company;

(b) the resolution specifies the number of shares, the current market price, consideration, if any, and the class or classes of directors or employees to whom such equity shares are to be issued;

(c) not less than one year has, at the date of such issue, elapsed since the date on which the company had commenced business; and

(d) where the equity shares of the company are listed on a recognised stock exchange, the sweat equity shares are issued in accordance with the regulations made by the Securities and Exchange Board in this behalf and if they are not so listed, the sweat equity shares are issued in accordance with such rules as may be prescribed.

(2) The rights, limitations, restrictions and provisions as are for the time being applicable to equity shares shall be applicable to the sweat equity shares issued under this section and the holders of such shares shall rank pari passu with other equity shareholders.

 

What is Global depository receipt What is Offer or invitation for subscription of securities on private placement Section 41 and 42 of Indian Companies Act 2013

SHARE CAPITAL AND DEBENTURES

What are the kinds of share capital Section 43 of Indian Companies Act 2013

What is the Nature of shares or debentures What is Numbering of shares What is  Certificate of shares Section 44, 45 and 46 of Indian Companies Act 2013

What is Voting rights What is variation of shareholders rights Section 47 and 48 of Indian Companies Act 2013

Calls on shares of same class to be made on uniform basis. Company to accept unpaid share capital, although not called up. Section 49 and 50 of Indian Companies Act 2013

What is Payment of dividend in proportion to amount paid up What is Application of premiums received on issue of shares. Section 51 and 52 of Indian Companies Act 2013

What is Prohibition on issue of shares at discount What is the procedure for Issue of sweat equity shares Section 53 and 54 of Indian Companies Act 2013

What is the rule for Issue and redemption of preference shares Section 55 of Indian Companies Act 2013

What are the conditions for Transfer and transmission of securities Section 56 of Indian Companies Act 2013

What is the Punishment for personation of shareholder What is the Refusal of registration and appeal against refusal Section 57 and 58 of Indian Companies Act 2013

What is Rectification of register of members and punishment for violation What is Publication of authorised, subscribed and paid-up capital Section 59 and 60 of Indian Companies Act 2013

 

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