Target Exam

CUET

Subject

-- Accountancy Part A

Chapter

Accounting for Shares

Question:

How a Company may issue the shares?

Options:

By Private Placement of Shares

By Public Subscription of Shares

For Consideration other than cash

All of the above

Correct Answer:

All of the above

Explanation:

The correct answer is option 4- All of the above.

A company can issue shares in multiple ways, as allowed under the Companies Act, 2013.

Private Placement of Shares-  The Companies Act, 2013 (Section 42) describes Private Placement as an offer of securities or invitation to subscribe securities to a select group of persons through issue of private placement offer letter.

Public Subscription of Shares- Shares are offered to the general public. It requires issuing a prospectus.

For Consideration Other Than Cash- Shares are said to be issued for consideration other than cash when a company purchases business, or some asset/assets, and the vendors have agreed to receive payment in the form of fully paid shares of a company.