Can the subscribers to MoA be issued shares at a premium at the time of incorporation?
If yes, can there be differential pricing/ premium between the subscribers?
Ashish Kedia (CA) (737 Points)
02 May 2013Can the subscribers to MoA be issued shares at a premium at the time of incorporation?
If yes, can there be differential pricing/ premium between the subscribers?
Pawan Mittal
(CA Final)
(702 Points)
Replied 04 May 2013
Dear Ashish Sir
Yes, the subscribers can be issued shares at a premium at the time of incorporation.
But you cannot have differential pricing/premium among subscribers.
Use thank button if you want to thank.
P C Agrawal
(Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad)
(8229 Points)
Replied 21 May 2013
There is no specific provision in the Companies Act for allowing or prohibiting issue of shares to the subscribers at premium. However, if shares are to be issued at premium, subscribers will have to disclose amount of premium in the undertaking to be given by them. If we go through Form of Memorandum of Association of a company limited by shares given in Table B of Schedule-I to the Act, we find that the undertaking by subscribers gives only number of shares and there is no provision for amount of premium. If we insert a column of amount of premium, ROC may not accept the same since it is not prescribed in the Act. Even otherwise, logically question of premium should come only after the company has come into existence and undertaken some activitiy. Hence in my view shares should not be issued to subscribers at premium.
Thanks
Analysis of 20 GST Notices (including 2 Appeals) and Practise on Drafting(with recording)
CAclubindia
