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Companies Act, 1973 (Act No. 61 of 1973)

Chapter V: Share capital, Acquisition by Companies of own Shares, Shares, Allotment and Issue of Shares, Members and Register of Members, Debentures, Transfers, and Restrictions on Offering Shares for Sale

Share capital

81. Issue of shares of par value at a discount

 

 

1) A company may issue at a discount shares of the company of a class already issued if the following conditions have been complied with:
a) such issue must be authorised by special resolution of the company specifying the maximum rate of discount at which the shares are to be issued; and
b) not less than one year must at the date of issue have elapsed since the date on which the company became entitled to commence business or the date of the first issue of the class of shares; and
c) such issue must be sanctioned by the Court; and
d) the shares to be issued at a discount must be issued within one month after the date on which the issue is sanctioned by the Court or within such extended time as the Court may allow.

 

2) The Court may on application for an order sanctioning any such issue, having regard to all the circumstances of the case, make an order on such terms and conditions as it thinks fit.

 

3) Every prospectus relating to the issue of shares by the company after the issue of the shares at a discount under this section shall contain particulars of the discount allowed on the issue of those shares or of so much of that discount as has not been written off at the date of the issue of the prospectus.

 

4) If default is made in complying with the requirements of subsection (3), the company, and every director and officer of the company who knowingly is a party to the default, shall be guilty of an offence.