Shikha Ltd. invited application for 30,000 shares of ₹ 10 each and received 50,000 applications. Which of the following alternative can be followed?

A. Refund the excess money and full allotment to rest of the applicants
B. Reject few applications, allot full shares to some applicants and allot shares on prorata basis to remaining.
C. Not to allot shares to some applicants and make prorata allotment to other applicants
D. Make prorata allotment to all applicants

Choose the correct answer from the options given below:

A, B, C & D Only

The correct answer is option 4- A, B, C & D Only.

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:
(1) they can accept some applications in full and totally reject the others.
(2) they can make a pro-rata allotment to all.
(3) they can adopt a combination of the above two alternatives which happens to be the most common course adopted in practice.

So, all the options are available to the company.