going ahead with the allotment of shares. According to the Companies Act, this is called the ‘minimum subscription’. The limit of minimum subscription is per cent of the size of the issue. Thus, if applications received for the shares are for an amount less than per cent of the issue size, the allotment cannot be made and the application money received must be returned to the applicants.
(v) Application to Stock Exchange: An application is made to at least one stock exchange for permission to deal in its shares or debentures. If such permission is not granted before the expiry of ten weeks from the date of closure of subscription list, the allotment shall become void and all money received from the applicants will have to be returned to them within eight days. (vi) Allotment of Shares: In case the number of shares allotted is less than the number applied for, or where no shares are allotted to the applicant, the excess application money, if any, is to be returned to applicants or adjusted towards allotment money due from them. Allotment letters are issued to the successful allottees.
Return of allotment, signed by a director or secretary is filed with the Registrar of Companies within days of allotment. A public company may not invite public to subscribe to its shares or debentures. Instead, it can raise the funds through friends, relatives or some private arrangements as done by Provisional Contract These are contracts which are signed after incorporation but before the commencement of business. These become enforceable only after the company gets the Certificate of Commencement of Business.
a private company. In such cases, there is no need to issue a prospectus. A ‘Statement in Lieu of Prospectus’ is filed with the Registrar at least three days before making the allotment. .
. Commencement of Business If the amount of minimum subscription is raised through new issue of shares, a public company applies to the Registrar of Companies for the issue of Certificate of Commencement of Business. The following documents are required: . A declaration that shares