Practicing Success
How can shares be issued when they are issued for consideration other than cash? |
At par At premium Cannot issue shares Both options 1 and 2 |
Both options 1 and 2 |
There are instances where a company enters into an arrangement with the vendors from whom it has purchased assets, whereby the latter agrees to accept, the payment in the form of fully paid shares of the company issued to them. Normally, no such cash is received for issue of shares. These shares can also be issued either at par, at premium and the number of shares to be issued will depend upon the price at which the shares are issued and the amount payable to the vendor. |