Pro-rata allotment of shares is made when there is : |
Under subscription of shares Oversubscription of shares As and when desired by directors On call of shareholders |
Oversubscription of shares |
The correct answer is option 2- Oversubscription of shares. Pro-rata allotment of shares is made when there is Oversubscription. There are instances when applications for more shares of a company are received than the number offered to the public for subscription. This usually happens in respect of shares issue of well-managed and financially strong companies and is said to be a case of ‘Over Subscription’. In such a condition, three alternatives are available to the directors to deal with the situation: |