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Law question.........................

vikas gupta (c.a final....) (714 Points)

14 March 2011

A ltd co. can make original issue of shares and cant make original issue of stock.......what does that original issue mean?

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Sunshine (Helping All) (10575 Points)
Replied 14 March 2011

original issue means 1st time issue...ie. when a company issues shares .it can sell its shares in primary market.but it cannot sell the stock in promary market.The company will 1st sell the shares and later convert them to stock.the company cannot straighaway issue stock...

television ki bhasha me...kyunki stock bhi kabhi share tha.......har stock ko stock banne se pehle share banna hota hai...

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(Guest)

agree with sunshine & greate reply by sunshine

Hardik Dave (IPCC and CS Professional(FINAL) Student) (15533 Points)
Replied 14 March 2011

Original Issue Stock-Original Issue Stock is securities issued when a firm is first incorporated. It refers to the amount by which a security's price at issuance is lower than par value. In the case of fixed-rate capital securities, original-issue discount considered to exist if issuer is entitled to elect to defer distributions. In structuring a private equity transaction, use of a preferred stock with liquidation preference or other clauses that guarantee a fixed payment in the future can potentially create adverse tax consequences.

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