Shares Issued at a Discount under Companies Act 2013
15 Questions
2 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

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?

    <p>Issuing sweat equity shares as per Section 54 of the Companies Act, 2013</p> 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?

    <p>Reserve Bank of India (RBI)</p> 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?

    <p>The company and its officers are punishable with a fine</p> 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?

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

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

    <p>12% per annum</p> 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?

    <p>Reserve Bank of India</p> Signup and view all the answers

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

    <p>Rule 11 of the Companies (Audit and Auditors) Rules, 2014</p> 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?

    <p>Impact of pending litigations on financial position</p> 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?

    <p>Provision for material foreseeable losses</p> 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?

    <p>Timely transfer of all funds without any delay</p> Signup and view all the answers

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

    <p>&quot;Whether funds have been advanced or loaned or invested by the company&quot;</p> Signup and view all the answers

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

    <p>&quot;Foreign entities&quot;</p> Signup and view all the answers

    More Like This

    Use Quizgecko on...
    Browser
    Open
    Browser
    Browser