Minimum subscription is the minimum amount that, in the opinion of directors, must be raised to meet the needs of business operations of the company relating to: (A) The price of any property purchased, or to be purchased, which has to be met wholly or partly out of the proceeds of issue;(B) Preliminary expenses payable by the company and any commission payable in connection with the issue of shares;(C) Working capital;(D) Any other expenditure required for the usual conduct of business operations Choose the correct answer from the options given below:
- A(A), (B) and (D) only
- B(A), (B) and (C) only
- C(A), (B), (C) and (D)
- D(B), (C) and (D) only
Solution & Step-by-step Explanation
According to the guidelines set by the Companies Act, the minimum subscription amount is calculated to ensure the company has enough funds to cover vital early costs and setup requirements. This includes financing asset acquisitions (A), paying off initial startup fees or broker commissions (B), securing everyday working capital (C), and covering any other essential operational costs (D). Therefore, all options (A), (B), (C), and (D) are correct.