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Business Studies

Application to Stock Exchange

Which step pr...

Question

Which step precedes the allotment of shares?

A

SEBI approval

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B

Filing of Prospectus

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C

Incorporation

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D

Application to Stock Exchange

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Solution

The correct option is D
Application to Stock Exchange

Application to stock exchange precedes allotment of shares.

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Similar questions

Q. Consider the following steps in the process of allotment of shares.
1. Issue of prospectus
2. Appointment of manager to the issue
3. Receipt of application money
4. Listing in a stock exchange
5. Minimum subscription
The correct chronological sequence of these steps is :

Q. A limited company issued a prospectus inviting application for 2,000 shares of Rs.10 each at premium of Rs. 2 per share payable ass follows:
On application - Rs. 2
On allotment - Rs. 5 (including premium)
On 1st call - Rs. 3
On llnd final call - Rs. 2
Application were received for 3,000 shares and allotment was mad on pro-rata basis to applicant of 2,400 shares. Money received in excess on application was adjusted towards allotment.
Ramesh whom 40 shares were allotted, failed to pay allotment money & first call his shares were forfeited. Find the number of shares Ramesh has applied for?

Q. Super Star Ltd. issued a prospectus inviting applications for 2,000 shares of ₹ 10 each at a premium of ₹ 2 per share , payable as:

On application	$—$	₹ 3 per share (including ₹ 1 premium),
On allotment	$—$	₹ 4 per share (including ₹ 1 premium),
On first call	$—$	₹ 3 per share
On second and final call	$—$	₹ 2 per share.

Applications were received for 3,000 shares and pro rata allotment was made on the applications for 2,400 shares . It was decided to utilise excess application money towards the amount due on allotment .
Ramesh, to whom 40 shares were allotted , failed to pay the allotment money and on his subsequent failure to pay the first call, his shares were forfeited.
Rajesh, who applied for 72 shares failed to pay the two calls and on such failure, his shares were forfeited .
Of the shares forfeited, 80 shares were sold to Krishan credited as fully paid-up for ₹ 9 per share, the whole of Ramesh's shares being included.
Give journal entries to record the above transactions ( including cash transactions).

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. Prince Limited issued a prospectus inviting applications for 20,000 equity shares of ₹10 each at a premium of ₹ 3 per share payable as follows:

With application	$—$	₹2,
On allotment (including premium)	$—$	₹5,
On first call	$—$	₹3,
On second call	$—$	₹3.

Applications were received for 30,000 shares and allotment was made on pro rata basis. Money overpaid on application s was adjusted to the amount due on allotment.
Mr Mohit whom 400 shares were allotted , failed to pay the allotment money and the first call , and his shares were forfeited after the first call . Mr Joly, whom 600 shares were allotted , failed to pay for the two calls and hence, his shares were forfeited .
Of the shares forfeited, 800 shares were reissued to Supriya as fully paid for ₹ 9 per share , the whole of Mr Mohit's shares being included.

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