Can forfeited shares be issued at discount if so at what price?
The maximum amount of discount on reissue of forfeited shares is that the amount of discount allowed cannot exceed the amount that had been received on forfeited shares on their original issue and that the discount allowed on re issue of forfeited shares should be debited to the share forfeited account.
Can the forfeited shares be issued?
Forfeited shares are available with the company for sale. … A company can re-issue these shares at any price but the total amount received on these shares should not be less than the amount in arrears on these shares. Here, total amount refers to the amount received from the original allottee and the second purchaser.
On what conditions are forfeited shares issued?
Forfeited shares become the property of the issuing company, which is entitled to either reissue the shares at par, at a premium, or a discount (at a price below their nominal value).
Can forfeited shares be reissued if so at what terms?
ADVERTISEMENTS: 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.
What is the maximum amount of discount at which forfeited shares can be re issued?
2. In case of the forfeited shares were originally issued at discount, then these forfeited shares can be reissued with the maximum discount equal = amount forfeited on the re-issued share + the discount allowed at the time of original issue.
Can forfeited shares be issued at premium?
When a share is forfeited on which the amount of premium has been made do but has not been received, either wholly or partially, the Securities Premium A/c will be cancelled and it will be credited. (Forfeiture of shares originally issued at premium due to non-payment of dues) .
When forfeited shares are issued the amount of discount allowed on the share Cannot exceed?
10% of the paid-up capital.
What type of account is forfeited shares?
Till the time the company re-issues the forfeited shares, it adds the balance of the Forfeited Shares Account to paid-up capital under Subscribed Capital in the Notes to Accounts on ‘Share Capital’. Being part of shareholders’ Funds we show it under Equity and Liabilities part of the Balance Sheet.
What entries are done in case of forfeiture and re issue of shares?
originally allowed. When the shares forfeited are reissued at discount, Bank account is debited by the amount received and Share capital account is credited by the paid up amount. The amount of discount allowed is debited to Share Forfeited Account.
What is the minimum price at which a company can reissue its forfeited shares?
The Company can reissue its fortified shares at par, at premium or at discount but the reissue price together with the amount already received on such shares should not be less than the called up amount on each share.