What is meant by minimum subscription of shares?

Minimum subscription refers to the minimum amount which a company should raise at the time of issuing capital. The requirement for minimum subscription applies to all companies which raise funds from the public. … Hence, in keeping with the expectations of the investors, the issue of capital should be halted.

What does subscription of share mean?

Definition: A stock subscription is a contract requiring an investor to purchase a set number of unissued shares from the corporation at a future date for a specific price.

What is minimum subscription for public company?

It has been provided by the Companies Act, that the company must receive applications for a certain minimum number of shares before going ahead with the allotment of shares in order to prevent companies from commencing business with inadequate resources. This is called the ‘minimum subscription’.

What is minimum subscription how it is calculated?

There can be no dispute about this position in view of the provisions of Section 69 of the Companies Act. The minimum subscription, therefore, would have to be calculated by taking into account the factum of number of withdrawal request rejections made qua share application received.

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What is minimum subscription in auditing?

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.

What is the minimum subscription?

Minimum subscription refers to the minimum amount which a company should raise at the time of issuing capital. The requirement for minimum subscription applies to all companies which raise funds from the public. … Hence, in keeping with the expectations of the investors, the issue of capital should be halted.

What is the minimum subscription percentage of companies?

According to SEBI (Securities and Exchange Board of India), every company needs a minimum subscription of 90% of the issued amount on the date of closure. In the event of this not happening, the company refunds the entire subscription amount it received.

How is minimum subscription different from under-subscription?

When the number of shares applied for by the public is less than the number of shares issued by the company, it is a situation of under-subscription. … However, if a company receiving under-subscription receives the minimum subscription, it can allot the shares for which it receives the application.

What is the size of minimum subscription As per Sebi?

While making an initial public offer and follow-on offer, minimum subscription should not be less than Rs 1 lakh for InvITs and Rs 50,000 for REITs under the current rules. Allotment to any investor is required be made in the multiples of a lot.

In which type of company minimum subscription is not compulsory?

(ii) A private company does not need to issue a prospectus as public is not invited to subscribe to its shares. (iii) Allotment of shares can be done without receiving the minimum subscription.

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What is the provision for minimum subscription of new issue of shares?

ADVERTISEMENTS: According to the circular (No. 2/14/CCI/90, dated 6.4. 1990, Department of Company Affairs, Ministry of Finance) the minimum subscription—in case of public issue or right issue or debenture issue—has been fixed at 90% of the entire issue.