There are two statements marked as Assertion (A) and Reason (R). Mark your answer as per the codes provided below-
Assertion: A company can issue shares at a discount only in certain cases.
Reasoning: A company can issue shares at a discount only in cases such as reissue of forfeited shares and issue of sweat equity shares.
Answer & explanation
Correct answer: option 1
Section 53 of Companies Act, 2013 – Prohibition on Issue of Shares at Discount. As a general rule, a company cannot ordinarily issue shares at a discount. It can do so only in cases such as ‘reissue of forfeited shares’ and issue of sweat equity shares.