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Question
In case the whole or a part of the shares issued are not subscribed by the public, who will subscribe such unsubscribed securities for a fixed commission?
In case the whole or a part of the shares issued are not subscribed by the public, who will subscribe such unsubscribed securities for a fixed commission?
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Solution
The correct option is C Underwriters
A company may enter into an underwriting or brokerage agreement for the sale of its shares and debentures. An underwriter guarantees that if the public do not take up all the shares, the underwriter will himself purchase the remaining shares and thus the company is able to obtain subscription for all the shares issued.
A company may enter into an underwriting or brokerage agreement for the sale of its shares and debentures. An underwriter guarantees that if the public do not take up all the shares, the underwriter will himself purchase the remaining shares and thus the company is able to obtain subscription for all the shares issued.
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