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easyMCQCUET Accountancy 2025 2 June Shift 22026CUET Accountancy
1 mark

In the case of an under-subscription of shares, which of the following statements is true?

  1. A
    Shares are allotted only when the company receives the subscription and application money on minimum subscription as stated in the prospectus.
  2. B
    Shares are allotted to all applicants without considering anything.
  3. C
    All the issued shares are allotted to all applicants proportionally.
  4. D
    The Issue Is Closed And Application Money Is Refunded.

Solution & Step-by-step Explanation

According to SEBI guidelines, a company must receive a minimum subscription of of the entire issued capital before proceeding with allotment. If an under-subscription occurs but it meets or exceeds this minimum target, the company can allot shares to the applicants. If it falls below this target, the entire issue fails and all application money must be refunded.

Practice this question

Try it yourself before checking the explanation above.

In the case of an under-subscription of shares, which of the following statements is true?
A
Shares are allotted only when the company receives the subscription and application money on minimum subscription as stated in the prospectus.
B
Shares are allotted to all applicants without considering anything.
C
All the issued shares are allotted to all applicants proportionally.
D
The Issue Is Closed And Application Money Is Refunded.

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Company AccountsShare CapitalUnder-subscription

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