Conditions for a company to issue shares

Q. The Companies (Issue of Capital) Rules, 1996 impose four (4) conditions for a company to issue shares for consideration other than cash. Describe those conditions.           

Ans: Issue of shares for Consideration other than in cash:

The four conditions are as follows:

1.  The value of assets shall be determined by consulting engineer registered with Pakistan Engineering Council and borne on the panel at least two financial institutions as a value.

2. The value of asset taken over shall be reduced by depreciation charged on consistent basis.

3.  The goodwill and other intangible assets shall be excluded from the consideration.

4. Certificate from a practicing chartered accountant shall be obtained to the effect that the above mentioned conditions have been complied with.