startup-costs, taxes, investment, accounting, indiaWe incorporated a software product development company in India with authorized share capital of 10L and paid up share capital of 1L with 10k shares. Investor is willing to invest 25L and wants 15% equity. We are thinking that we have to issue new shares and allot them to investor for 25L. How do we account this 25L and under what head. Does this attract any tax to company and/or to the investor? Should we issue and allot those 1500 odd shares (not the exact math, for simplicity) to investor at premium price or is there any other way?
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