ISSUE OF SHARES AT DISCOUNT :

When shares are issued at a price lower than the face value, they are said to be issued at discount. Thus, the
excess of the face value over the issue price is the amount of discount. For example, if a share of ` 10 is issued
at ` 9 then ` (10 – 9) = Re. 1 is the discount.

As per companies Act 2013, a company shall not issue shares at a discount except as provided in section 54 for
issue of sweat equity shares. Any share issued by a company at a discounted price shall be void.

Where a company contravenes the provisions of this section, the company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees and every officer who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees, or with both.