01 November 2013
The AOA of H ltd contained a provision that up to 3% of the issues price of the shares as underwriting commission may be to the underwriters. The Board of directors of the company decided to pay 4% underwriting commission. Can the Board of Directors do so? Also state the provisions of law in this regard as stated under Companies act 1956.
01 November 2013
AOA can prescribe a lower rate of underwriting commission & BOD must follow that rate only.Since company can pay a maximum rate of 5% underwriting commission,so alteration in AOA has to be made first.
CAclubindia
