Issue of shares at a discount

Issue of shares at a discount

March 26, 2019

A company has the power to issue shares to its subscribers up to the total number authorized in the memorandum. Issuing of shares at a discount is made possible by virtue of sec 121 Company and Allied Matters Act. However there are guidelines to the realization of issuing shares at a discount as set out in section 121 CAMA.

REQUIREMENT

  • The issue of the shares must be authorized by a resolution passed in the general meeting of the company and sanctioned by the court.
  • The resolution must state the maximum rate at which shares will be issued without discount
  • The discounted shares must be issued within a month after the issue is sanctioned by the court or within such time as the court may allow.

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The information in this blog post (“post”) is provided for general informational purposes only, no information contained in this post should be construed as legal advice, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through this post without seeking the appropriate legal or professional advice from the particular facts and circumstances at issue from a lawyer. This post is protected by intellectual property law and regulations. It may however be shared using appropriate sharing tools provided that our authorship is always acknowledged and this Disclaimer Notice attached.

 

 

 

 

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