Share Allotment

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 March 2010 A company is having Shares of Rs 10 as face value and Rs 90 as premium. I would like to know that whether the company can issue further share of face value Rs 10 but premium of Rs 2000.

Kindly advise us the provisions which governs the issue of shares at a premium ?

It is a pvt ltd company

This is very very urgent.

Rasesh

Rasesh (Expert)
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04 March 2010 The Company would be required to prove the change in valuation. If the time gap is too large between the two series of share issues and the valuations of the Company suggest such premium then only it can be charged.

The amount of premium is at the discretion of the Board of Directors.

Querist : Anonymous

Querist : Anonymous (Querist)

04 March 2010 If we charge huge premium whether any authority may ask for clarification.

Is there any compulsory valuation for premium for pvt companies

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Rasesh

Rasesh (Expert)
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04 March 2010 generally it is only the income tax dept which may enquire into the details at the time of regular assessment.

There is no law for valuation of premium for private limited companies.