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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