The important steps in the procedure of share issue are:

(A) The company issues the prospectus to the public.

(B) The company has to get minimum subscription within 120 days from the date of the issue of the prospectus.

(C) The prospective investors intending to subscribe the share capital of the company would make an application along with the application money

(D) Letters of allotment are sent to those whom the shares have been allotted, and letters of regret to those to whom no allotment has been made.

Choose the correct sequence of steps from the options given below:

(A), (C), (B), (D)

The correct answer is option 2- (A), (C), (B), (D).

The important steps in the procedure of share issue are as follows-

(A) The company issues the prospectus to the public- The company issues a prospectus to the public, which is a document that provides information about the company and the shares it is issuing. The prospectus is an invitation to the public to subscribe to the shares.

(C) The prospective investors intending to subscribe the share capital of the company would make an application along with the application money-  Prospective investors who wish to purchase shares in the company submit applications along with the application money. The application money is deposited into a scheduled bank as specified in the prospectus.

(B) The company has to get minimum subscription within 120 days from the date of the issue of the prospectus- The company must receive the minimum subscription amount within 120 days of issuing the prospectus. If the company does not receive the minimum subscription amount within this time period, it cannot proceed with the allotment of shares and must return the application money to investors within 130 days of issuing the prospectus.

(D) Letters of allotment are sent to those whom the shares have been allotted, and letters of regret to those to whom no allotment has been made- If the company receives the minimum subscription amount, it may proceed with the allotment of shares after fulfilling certain legal formalities. The company sends letters of allotment to the investors who have been allocated shares and letters of regret to investors who have not been allocated shares. Once shares have been allotted, a valid contract is formed between the company and the investors, who are now shareholders of the company. After the allotment of shares, share application money is transferred to share capital A/c.