Question

1,00,000 equity shares of Rs. 10 each are issued at a premium of 10% to redeem the preference shares, the proceeds of a fresh issue under Section 80 is ________.

• A. Rs. 10,00,000
• B. Rs. 11,00,000
• C. Nil
• D. None of these

Answer 1

Answer: (A)

Rs. 10,00,000

Under sec 80 o the companies Act the word "proceeds" does not include the amount of the premium if the shares are issued at a premium but stands for the actual amount received if shares are issued at a discount or at par.

Proceeds of a fresh issue= 1,00,000*10 = 10,00,000.