Commission & Discount of issue share capital

SUCHIT C. AGAWANE ROLL NO:- 101

Commission
An underwriting agreement is an agreement between the company and an individual, a firm or an institution know as an underwriter, where by the letter agrees to take up the whole or part of the shares which may not be subscribed by the public in consideration of Commission.

Conditions for payment of Commission (sec 76)

The payment of the Commission is authorised by the articles of the company. II. The rate of Commission does not exceed five per cent of the price which shares are issued. III. The rate per cent of the Commission must be disclosed in the prospectus. IV. The no. share which has been underwritten must be indicated in the prospectus.
I.

Conditions of discount of share (sec.79)

The issue must be of a class of shares already issued. II. Not less than 1 year has at the date of issue elapsed since the date on which the company became entitled to commence business. III. The issue at a discount is authorized by a resolution passed by the company in the general meeting & sanctioned by the company law board. IV. The maximum rate of discount must not exceed 10% or such rate as the company law board may permit. V. The shares to be issued at a discount must be issued within two months of the sanction by the company law board or within such extended time as the company law board may allow.
I.

Thank you