Section 53 of Companies Act 2013-Prohibition on Issue of Shares at Discount.
Section 53(1) of Companies Act 2013
Except as provided in section 54, a company shall not issue shares at a discount.
Section 53(2) of Companies Act 2013
Any share issued by a company at a discount price shall be void.
Section 53(2A) of Companies Act 2013
Notwithstanding anything contained in sub-sections (1) and (2), a company may issue shares at a discount to its creditors when its debt is converted into shares in pursuance of any statutory resolution plan or debt restructuring scheme in accordance with any guidelines or directions or regulations specified by the Reserve Bank of India under the Reserve Bank of India Act, 1934 or the Banking (Regulation) Act, 1949.
Section 53(3) of Companies Act 2013
Where any company fails to comply with the provisions of this section, such company and every officer who is in default shall be liable to a penalty which may extend to an amount equal to the amount raised through the issue of shares at a discount or five lakh rupees, whichever is less, and the company shall also be liable to refund all monies received with interest at the rate of twelve per cent. per annum from the date of issue of such shares to the persons to whom such shares have been issued.
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