As per the companies Act, a company cannot proceed to allot shares unless ___________ is received.

Minimum subscription

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Allotment Money

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Application money

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Call money

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Solution

The correct option is A Minimum subscription
If the company does not receive applications for at least 90% of the issued amount from public subscription within 120 days from the date of the opening of the issue,the company has to refund the amount of subscription.
This is called Minimum Subscription.

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Similar questions

Q. No shares can be allotted by a public company unless it collects ___________.

A company has offered for subscription to the public 10,000 shares of Rs 10 each. It has received applications for 15,000 shares. Company has decided to allot shares on prorata basis. Gunakshi holding 200 shares failed to pay

allotment money and first call money. Her shares were forfeited :

Amount payable was as under :

Rs 2 per share on application.

Rs 3 per share on allotment.

Rs 5 per share on call.

Calculate the amount unpaid on allotment.

Q. According to SEBI guideline a company must receive a minimum of _______% subscription before making any allotment of shares to the public.

Eastern Company Limited, having an authorised capital of Rs 10,00,000 in shares of Rs 10 each, issued 50,000 shares at a premium of Rs 3 per share payable as follows :

On Application

Rs 3 per share

On Allotment (including premium)

Rs 5 per share

On first call (due three months after allotment) and the balance as and when required.

Rs 3 per share

Applications were received for 60,000 shares and the directors allotted the shares as follows :

(a) Applicants for 40,000 shares received shares, in full.

(b) Applicants for 15,000 shares received an allotment of 8,000 shares.

All amounts due on allotment were received.

The first call was duly made and the money was received with the exception of the call due on 100 shares.

Give journal and cash book entries to record these transactions of the company. Also prepare the Balance Sheet of the company.

Q. If a company receives excess application money and the application money equal to shares issued transferred to Share Capital A/c and application money received on excess shares-some money is adjusted and against allotment and remaining was refunded, then which of the following entry is correct?

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As per the companies Act, a company cannot proceed to allot shares unless ___________ is received.

The correct option is A Minimum subscriptionIf the company does not receive applications for at least 90% of the issued amount from public subscription within 120 days from the date of the opening of the issue,the company has to refund the amount of subscription.This is called Minimum Subscription.