The Board of Directors Vishvas Ltd. decide to pay 5% of the issue price of shares as underwriting commission to the underwriters. However, the…

CA Intermediate · Corporate and Other Laws · MTP · September 2024
The Board of Directors Vishvas Ltd. decide to pay 5% of the issue price of shares as underwriting commission to the underwriters. However, the Articles of Association of the company permit only 3% commission. What is the maximum amount of underwriting commission that can be paid to the underwriters.
(A) 2%
(B) 3%
(C) 5%
(D) No limit has prescribed under the Companies Act, 2013 in case underwriting commission is to be paid in case of issue of shares.

Suggested Answer and Working Notes:

Correct Answer: Option (B)

3%

Topics: The Foreign Exchange Management Act, 1999, Incorporation of Company and Matters Incidental Thereto

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