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Explain minimum subscription?

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 kruthika asked over 2 years ago

Hi Friends, I am Kruthika. I am preparing for CA exam. May I know, Explain minimum subscription?

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5 Answers
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 acharya answered over 2 years ago

Ins. by Act 31 of 1965, s. 8 (w. e. f. 15- 10- 1965 ). stated in the prospectus as the minimum amount which, in the opinion of the Board of directors, must be raised by the issue of share capital in order to provide for the matters specified in clause 5 of Schedule II has been subscribed, and the sum payable on application for the amount so stated has been paid to and received by the company, whether in cash or by a cheque or other instrument which has been paid. (2) The amount so stated in the prospectus shall be reckoned exclusively of any amount payable otherwise than in money, and is in this Act referred to as" the minimum subscription". (3) The amount payable on application on each share shall not be less than five per cent. of the nominal amount of the share.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 narahari answered over 2 years ago

1. Ins. by Act 31 of 1965, s. 8 (w. e. f. 15- 10- 1965 ). stated in the prospectus as the minimum amount which, in the opinion of the Board of directors, must be raised by the issue of share capital in order to provide for the matters specified in clause 5 of Schedule II has been subscribed, and the sum payable on application for the amount so stated has been paid to and received by the company, whether in cash or by a cheque or other instrument which has been paid. (2) The amount so stated in the prospectus shall be reckoned exclusively of any amount payable otherwise than in money, and is in this Act referred to as" the minimum subscription". (3) The amount payable on application on each share shall not be less than five per cent. of the nominal amount of the share. (4) 1 All moneys received from applicants for shares shall be deposited and kept deposited in a Scheduled Bank- (a) until the certificate to commence business is obtained under section 149; or (b) Where such certificate has already been obtained, until the entire amount payable on applications for shares in res- pect of the minimum subscription has been received by the company, and where such amount has not been received by the company within the time or the expiry of which the moneys received from the applicants for shares are required to be repaid without interest under sub- section (5), all moneys received from applicants for shares shall be returned in accordance with the provisions of that sub- section. In the event of any contravention of the provisions of this sub- section, every promoter, director or other person who is knowingly responsible for such contravention shall be punishable with fine which may extend to five thousand rupees.]

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Picsjoin 2017224123730582 Archana answered over 2 years ago

Hie Kruthika, **Minimum Subscription.** - Minimum subscription is the term which is used to represent the amount of the issue which has to be subscribed or else the shares can't be issued if it is not being subscribed. Company which is offering the shares to the public then they set a specific amount for the subscription which can be taken by the public in order to issue the shares.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Mukesh answered over 2 years ago

. Prohibition of allotment unless minimum subscription received. (1) No allotment shall be made of any share capital of a company offered to the public for subscription, unless the amount 1. Ins. by Act 31 of 1965, s. 8 (w. e. f. 15- 10- 1965 ). stated in the prospectus as the minimum amount which, in the opinion of the Board of directors, must be raised by the issue of share capital in order to provide for the matters specified in clause 5 of Schedule II has been subscribed, and the sum payable on application for the amount so stated has been paid to and received by the company, whether in cash or by a cheque or other instrument which has been paid. (2) The amount so stated in the prospectus shall be reckoned exclusively of any amount payable otherwise than in money, and is in this Act referred to as" the minimum subscription". (3) The amount payable on application on each share shall not be less than five per cent. of the nominal amount of the share. (4) 1 All moneys received from applicants for shares shall be deposited and kept deposited in a Scheduled Bank- (a) until the certificate to commence business is obtained under section 149; or (b) Where such certificate has already been obtained, until the entire amount payable on applications for shares in res- pect of the minimum subscription has been received by the company, and where such amount has not been received by the company within the time or the expiry of which the moneys received from the applicants for shares are required to be repaid without interest under sub- section (5), all moneys received from applicants for shares shall be returned in accordance with the provisions of that sub- section. In the event of any contravention of the provisions of this sub- section, every promoter, director or other person who is knowingly responsible for such contravention shall be punishable with fine which may extend to five thousand rupees.] (5) If the conditions aforesaid have not been complied with on the expiry of one hundred and twenty days after the first issue of the prospectus, all moneys received from applicants for shares shall be forthwith repaid to them without interest; and if any such money is not so repaid within one hundred and thirty days after the issue of the prospectus, the directors of the company shall be jointly and severally liable to repay that money with interest at 1. Subs. by Act 31 of 1965, s. 9, for sub- section (4) (w. e. f. 15- 10- 1965 ). the rate of six per cent. per annum from the expiry of the one hundred and thirtieth day: Provided that a director shall not be so liable if he proves that the default in the repayment of the money was not due to any mis- conduct or negligence on his part. (6) Any condition purporting to require or bind any applicant for shares to waive compliance with any requirement of this section shall be void. (7) This section, except sub- section (3) thereof, shall not apply in relation to any allotment of shares subsequent to the first allotment of shares offered to the public for subscription.

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Open uri20170510 32134 1uwcnoc?1494421631 Shubhangi Jain answered over 2 years ago

Minimum subscription is the term which is used to represent the amount of the issue which has to be subscribed or else the shares can't be issued if it is not being subscribed. Company which is offering the shares to the public then they set a specific amount for the subscription which can be taken by the public in order to issue the shares.

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