Question

Z Ltd. proposed to issue 1,00,000 equity shares of Rs. 100 each at a premium of 20%. The minimum amount of application money to be collected per share as per the Companies Act, 2013 will be _____.

• A. Rs. 5
• B. Rs. 6
• C. Rs. 12
• D. Rs. 8

Answer 1

The correct option is A Rs. 5

Here 1,00,000 shares are issued at Rs 100 each with premium of 20% i.e. Rs 120 is the price of the share. As per section 39 of the Companies Act, 2013, the amount payable on application on every security shall not be less than five per cent. of the nominal amount of the security or such other percentage or amount, as may be specified by the Securities and Exchange Board by making regulations in this behalf. Hence, here the nominal value of share is Rs 100, hence minimum amount of application money to be collected per share as per the Companies Act, 2013 will be Rs 5.