Shares Issued at a Discount under Companies Act 2013

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What is the consequence if a company issues shares at a discounted price without meeting the conditions specified in Section 53 of the Companies Act, 2013?

The shareholders have the right to demand a refund for the excess amount paid

The company is required to obtain approval from the Reserve Bank of India for the discounted issuance

The company is obligated to compensate the existing shareholders for the discounted issuance

The discounted shares are considered void (correct)

According to Section 53 of the Companies Act, 2013, under what circumstance can a company issue shares at a discount?

When the company wants to reward its employees with sweat equity shares

When the company wants to increase its cash reserves by selling shares at a discount

When the company's debt is converted into shares as per statutory resolution plan or debt restructuring scheme (correct)

When the company wants to attract new investors by offering discounted shares

Under what circumstances can a company issue shares at a discount to its creditors, as per the Companies Act, 2013?

When its debt is converted into shares in accordance with statutory resolution plan or debt restructuring scheme (correct)

When seeking approval from the Reserve Bank of India for debt restructuring

In compliance with guidelines or directions specified by the Reserve Bank of India for debt conversion

To settle outstanding debts with its creditors

What is the exception mentioned in Section 53 of the Companies Act, 2013, regarding issuing shares at a discount?

Issuing sweat equity shares as per Section 54 of the Companies Act, 2013 Signup and view all the answers

What regulatory authority is responsible for specifying guidelines or directions for debt restructuring and issuance of shares at a discount, as per Section 53 of the Companies Act, 2013?

Reserve Bank of India (RBI) Signup and view all the answers

What is the consequence if a company issues shares at a discount without complying with the conditions specified in Section 53 of the Companies Act, 2013?

The company and its officers are punishable with a fine Signup and view all the answers

What penalty may a company and its defaulting officers be liable to if the company fails to comply with the provisions related to issuing shares at a discount?

An amount equal to the amount raised through the issue of shares at a discount or five lakh rupees, whichever is less Signup and view all the answers

What is the rate of interest applicable for refunding monies received from issuing shares at a discount?

12% per annum Signup and view all the answers

Which authority's guidelines or directions should be followed if a company issues shares at a discount to its creditors when its debt is converted into shares?

Reserve Bank of India Signup and view all the answers

Which rule prescribes the other matters to be included in the auditor’s report?

Rule 11 of the Companies (Audit and Auditors) Rules, 2014 Signup and view all the answers

In the auditor’s report, what matter should include their views and comments according to Rule 11 of the Companies (Audit and Auditors) Rules, 2014?

Impact of pending litigations on financial position Signup and view all the answers

Under Rule 11, what should be verified by the auditor in relation to long term contracts including derivative contracts?

Provision for material foreseeable losses Signup and view all the answers

According to Rule 11, what should the auditor check regarding transferring amounts to the Investor Education and Protection Fund?

Timely transfer of all funds without any delay Signup and view all the answers

Which matters are specifically mentioned in point (iv) of rule 11 for inclusion in the auditor’s report?

"Whether funds have been advanced or loaned or invested by the company" Signup and view all the answers

"Ultimate Beneficiaries" referred in point (iv) of rule 11 are associated with which entities according to the text?

"Foreign entities" Signup and view all the answers

Shares Issued at a Discount under Companies Act 2013

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