# Frequent question: What is the maximum amount of discount at which forfeited shares can be re issued?

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## What is maximum discount on issue of shares?

There is a cap on the rate of discount. A company cannot issue any shares at more than 10% discount.

## What is the minimum price at which forfeited shares can be reissued?

Here is your answer. The Re-issue price of forfeited shares must be at least equal to the difference between the paid up value of Re-issued Shares and the Amount Forfeited on Re-issue Shares. In other words, Re-issue price must not be less than the amount unpaid on Forfeited Shares. Regards.

## What is the restriction on reissue of forfeited shares at discount?

Board will decide the new price of reissue of shares. These shares can be reissued at par value, at premium value or at discount. There is no restriction on amount of premium for reissue of shares.

## Which shares are issued at discount?

When Shares are issued at a price lower than their face value, they are said to have been issued at a discount. For example, if a share of Rs 100 is issued at Rs 95, then Rs 5 (i.e. Rs 100—95) is the amount of discount. It is a loss to the company.

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## Can forfeited shares be re-issued at discount?

These shares can be reissued at par, at premium or at discount. … The amount of discount allowed at the time of reissue in no case should be more than the amount forfeited on such shares.

## What is minimum amount a share can be issued at?

i) In case of public issue at par, the minimum number of shares for which an application is to be made, shall be fixed at 200 shares of face value of Rs. 10/- each.

Offer price per share Minimum Tradeable lot
Rs 101- Rs 400 50 Shares
More than Rs. 400 10 Shares

## When shares are forfeited share capital account is?

When shares are forfeited, share capital account is debited. Explanation: Share Capital Account represents the liability of the company as it is the amount that is borrowed from the public. Therefore, at the time of forfeiture of shares, it is debited with a called-up amount.

## At what price may a company re-issue shares which have been forfeited?

The company forfeits his shares and re-issues them. Now, the amount in arrear is ₹7 per share. The company can re-issue the shares at ₹7 or more. Thus, it cannot issue shares at a price less than ₹7.

## How do you calculate profit on reissue of forfeited shares?

At the time of reissue of forfeited shares a discount of Rs 2 per share is allowed so the total amount of discount of Rs 400 is adjusted from the forfeited amount of Rs 600 and the balance amount of Rs 200 is transferred to Capital Reserve A/c being a capital gain.

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## Can forfeited shares be reissued if so at what terms?

The directors of the company are empowered to re-issue the forfeited shares if authorized by its articles. A forfeited share may be sold or otherwise disposed of, on such terms and in such manner as the Board thinks fit. Such shares may be re-issued at par, at a premium or even at a discount.

## How can profit on reissue of forfeited shares be treated in accounts?

If a Company makes any loss on reissue of shares, such loss is made good by making adjustments by debiting the Forfeited Shares Account. The balance remaining the forfeited Share Account is a capital profit and it must be transferred to Capital Reserve Account.