Question

On issue of shares, the application money must not be less than _____________.

• A. 2.5% of the nominal value of shares
• B. 2.5% of the issue price of shares
• C. 5.0% of the nominal value of shares
• D. 5.0% of the issue price of shares

Answer 1

Answer: (C)

5.0% of the nominal value of shares

Nominal value is the value of a share decided by a company which remains the same throughout the working of that company.

The $SEBI$ has allotted a minimum of5% of the nominal value for the amount to be charged as the share application money. This means that a company can demand minimum of 5% of the value when the shareholders apply for the issue of shares.