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Pro-Rata Basis of Allotment

Pro-rata allo...

Question

Pro-rata allotment of shares means allotment of shares _____________.

A

equally among all the applicants

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B

at the discretion of the directors

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C

to all the applicants in proportion to the shares applied for

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D

to only a few selected applicants

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Solution

The correct option is C to all the applicants in proportion to the shares applied for
Pro-rata allotment refers to the allotment of shares in proportion of the shares applied for. When a company makes pro-rata allotment, it adjusts the excess money received at the time of application firstly, towards the allotment and then towards calls.

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Similar questions

Q. A company invited applications for certain number of equity shares and received applications for more number of shares along with the applications money. Which of the following alternative can be followed?
I. Refund the excess applications.
II. Make pro-rata allotment to all the applicants, and no refund of excess application money.
III. Not to allot any shares to some applicants, full allotment to some of the applications and pro-rata allotment to the rest of the applicants.
IV. Not to allot any shares to some applicants and make pro-rata allotment to other applicants.

Q. A company invited applications for 25,000 equity shares of Rs 10 each and received 30,000 applications along with the application money of Rs 4 per share. Which of the following alternatives can be followed?
I. Refund the excess applications.
II. Make pro rata allotment to all the applicants, and refund the excess application money.
III. Not to allot any shares to some applicants, full allotment to some of the applicants and pro rata allotment to the rest of the applicants.
IV. Not to allot any shares to some applicants and make pro rate allotment to other applicants.
V. Make pro rata allotment to all the applicants and adjust the excess money received towards call money.

PRACTICAL PROBLEMS

(Issue at discount and Pro-rate allotment)

Global IT Ltd. issued 1,00,000 shares of 10 each at a discount of 10% payable as follows-

On Application	:	Rs 3	On Allotment	:	Rs 3 (Discount)
On First Call	:	Rs 2	On Second Call	:	Rs 1

Public applied for 1,20,000 shares and the directors made pro-rata allotment to the applicants.

Show the journal of the company assuming that all money received on allotment and calls.

Q. Tee Ltd. had allotted 10,000 shares to the applicants of 14,000 shares on a pro-rata basis. The amount payable on application was ₹ 3 and balance on allotment. F applied for 420 shares. The amount received on allotment from F will be:

[0.88 marks]

Q. Shiril Ltd. had allotted 40,000 shares to the applicants of ₹56,000 shares on a pro rata basis. The amount payable on application is ₹2 per share. Mahira applied for 1,680 shares. Calculate the number of shares allotted to Mahira:

[2 marks]

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Pro-Rata Basis of Allotment

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