A private limited company offered 1 lakh shares out of which 91k shares were applied to. Spite of getting applications, it couldn't go ahead with SEBI approval. The reason which stopped the company from going ahead is non-adherence to the minimum subscription rule.

True

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False

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Solution

The correct option is B
False

A private limited company cannot raise funds from the public. This is the reason why it was not approved by SEBI.

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Similar questions

On April 1,2018, a Limited Company was incorporated with an authorised capital of Rs 8,00,000 divided into shares of Rs 10 each.

It offered to the public for subscription of 60,000 shares payable as follows:

$\begin{matrix} On Application & Rs 3 per share On Application (May 1,2018) & Rs 2 per share On First and Final Call (One month after allotment) & Rs 5 per share \end{matrix}$

Public applied for 92,000 shares and the application money was duly received on April 15, 2018.Applications for 2,000 shares were rejected and applicants for 90,000 shares were allotted 60,000 shares.

Give journal entries to record the transactions in the books of the company if:

(i) The amount due has been duly received.

(ii) The company maintains the combined account for application and allotment.

Q. A company offered 2,00,000 shares for subscription to the public, but the applications were received for 1,90,000 shares only. The allotment will be confirmed to _________ shares.

Q. Fill in the blanks:
(a) The East India Company was a ________ company.
(b) The Reserve Bank of India is a _________.
(c) Reliance Industries Limited is a _________ company.
(d) A does not have share capital.
(e) The liability of members of a company is unlimited.
(f) A company which holds 51% more of the shares of another company is called _________.
(g) Steel Authority of India Limited is a company.
(h) Coca Cola Corporation is a company.
(i) Minimum share capital in a private company is Rs________.

Q. When applications for more shares of a company are received than the number offered to the public for subscription, it is known as .

There are instances when applications for more shares of a company are received than the number offered to the public for subscription. It is known as ___

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A private limited company offered 1 lakh shares out of which 91k shares were applied to. Spite of getting applications, it couldn't go ahead with SEBI approval. The reason which stopped the company from going ahead is non-adherence to the minimum subscription rule.

The correct option is B False A private limited company cannot raise funds from the public. This is the reason why it was not approved by SEBI.

The correct option is B
False

A private limited company cannot raise funds from the public. This is the reason why it was not approved by SEBI.