*The essential steps in the process of issuing shares are as follows:
1) Issuing the Prospectus: Initially, the company releases a prospectus to the public. This document serves as an invitation, informing the public that a new company has been established and requires funding to conduct its business operations. The prospectus contains comprehensive information about the company, including how funds will be collected from potential investors.
2) Receiving Applications: Once the prospectus is made available to the public, individuals interested in subscribing to the company's share capital submit applications along with the required application funds, depositing them in a designated bank as specified in the prospectus. The company must receive a minimum subscription within 120 days from the date of prospectus issuance.
3) Allotting Shares: If the minimum subscription is achieved, the company can proceed with the allotment of shares, following certain legal formalities. Letters of allotment are sent to those who have been allocated shares, while letters of regret are sent to those who have not. The allotment of shares establishes a valid contract between the company and the applicants, who then become shareholders.
4) Making Calls: The process of making calls is crucial for fully paying up shares and collecting the full share amount from shareholders. After allotment, the company issues calls. If shares are not fully paid up by the end of the allotment process, the directors have the authority to request the remaining payment on the shares as they see fit.
* Firstly money is due then it is paid by shareholders. |
