Arrange following in correct sequence related to issue of shares.

(A) Letters of allotment, and letters of regret are sent

(B) Prospective investors would make an application along with the application money

(C) The company issues the prospectus to the public

(D) Sebsequent installment are called

Choose the correct answer from the options given below:

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

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

(C) 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.

(B) Prospective investors 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. The company must receive the minimum subscription amount within 120 days of issuing the prospectus.

(A) Letters of allotment, and letters of regret are sent- 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.

(D) Sebsequent installment are called- The company may make one or more calls for the remaining unpaid amount. Calls play a vital role in making shares fully paid-up and for realising the full amount of shares from the shareholders. After allotment a company make calls. In the event of shares not being fully called up till the completion of allotment, the directors have the authority to ask for the remaining amount on shares as and when they decide about the same. It is also possible that the timing of the payment of calls by the shareholders is determined at the time of share issue itself and given in the prospectus. Two points are important regarding the calls on shares. First, the amount on any call should not exceed 25% of the face value of shares. Second, there must be an interval of at least one month between the making of two calls unless otherwise provided by the articles of association of the company.