Question

X Ltd. proposed to issue 5000 equity shares of Rs 100 each at a premium of 20%. The minimum amount of application money to be collected per share = ?

• A. Rs 5.00
• B. Rs 6.00
• C. Rs 7.00
• D. Rs 8.40

Answer 1

The correct option is A Rs 5.00

Application money is that amount which a company has called up at first when the shares are issued.

As per the companies act 2013. application money must be $5$% of the face value of a share and the face value of shares issued by X Ltd. is Rs $100$

$Applicationmoneypershare=\frac{5}{100}\times Rs100=Rs5$.