Answer / ajay

Issuing the shares at premiums is a matter of great
concern. if a share is issued at premium it may reflect
various things like wise.
-Market Requirement of Product or services.
-Quality of prod. or services
-Market Capitalization of pro. & ser.
-board competency
-Brand loyality
etc.
As the rate of above goes higher, the result is high rate
of preimium and vice-e-versa.

considering the same there may a practical scenario, take a
private company for eg.-
-Authorised capital - Rs 50.00 lacs (50,000 equity of Rs.
100 each.)
-Share issued and subscribed 20,000 shares @ Rs.425
(including premium of Rs. 325.to person other than promoters
-Shares issued otherwise than for cash to the Promotrs is
29,000
Shares subscribed by promoters as asubscriber to memorandum
is 1,000 equity.
NOW UNDERSTAND THE CAPITAL AND CONTROLLING STRUCTURE OF THE
CO.-
PROMOTERS INVOLVEMENT IN CAPITAL IN CASH OR OTHERWISE-
EQUITY (in no.)- 30,000 or 60% voting power i.e control in
hand
VALUE PAID FOR THE SHARES- 30.00 LACS (1.00 LACS IN CASH
AND OTHER 29.00 LACS IN KIND)
OTHERS INVOLVEMENT IN CASH-
EQUITY- 20,000 OR 40% voting power.
VALUE PAID FOR THE SHARES-Rs. 85.00 lacs (including premium
amount of Rs. 65.00 lacs)

Let's check the Banks position-
There is Rs. 86.00 lacs in the co.(s) banks account outof
which only Rs. 1.00 lacs is promoters contribution.

This all happend due to TTHE CORPORATE, MANAGEMENT, BRAND,
PRODUCT OR SEVICE STANDARD OF THE CO. WHICH ULTIMATLY
MOTIVATES THE CORPORATES TO ISSUE THE SHARES ART PREMIUM.

Answer / reena

The Company might be opening with a huge project and for
that purpose the Company might require huge capital . As
the Company wants to issue less capital (number of shares),
it might be issuing the shares at a premium for raising teh
funds.

Answer / sachin

THE NEWLY EXSTABLISHED COMPANY SHOULD BE A SISTER CONCERN
OR A SUBSIDIARY OF AREPUTED COMPANY

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