Issue of preference shares with at different rate& write off

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

31 January 2012 As per the MOA and AOA of a Pvt Ltd company the authorised share capital of the company is Rs. 25,00,000 cosisting of 1,50,000 equity shares of Rs.10/- each and 10,000 preference shares of Rs. 100 each .

The paid up capital of the company as on date is Rs. 10,000 equity shares of Rs.10 each and 3,500 preference shares of Rs.100 each issued with premium at Rs. 2000 per share.

Now the Company wants to issue 6,000 preference shares (out of the available 6,500 preference shares ) to two different entities of face value of Rs.100 each with premium of Rs.4,900 per share ie., totally Rs. 5,000 per share.,

Now the question is whether Company can now issue preference shares at a premium of RS.4,900 when it has issued 3,500 preference shares earlier at Rs.1,900 premium per share.

If yes, what is the procedure to be adopted.

Please also bear in mind that shortly the company to whom 3,500 preference shares have been allotted will be writing off the investments in their books as not worth its premium.

In such a scenario, is it correct to issue preference shares, of course, to entirely two new different entities at a premium of Rs.4,900/- per share.

Pls advise

Jiten Gupta

Jiten Gupta (Expert)
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31 January 2012 As per my view, you can issue the Preference Shares with different premium amount.

By passing a Board Resolution, this can be done. Further E-Form 2 shall be filed for return of allotement.