Accountancy Part AAccounting for Shares

Minimum Subscription of capital:

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → Can not be less than 90% of the Issued amount

Minimum subscription is the least amount the company must raise from an issue. The book fixes it at 90% of the issued amount; if that much is not received, the whole subscription money is refunded.

Why the other options are incorrect

Option (1) Can be less than 90% of the Issued capital — Incorrect. 90% is the floor; anything below it means the issue fails.
Option (2) Should be equal to at least 50% of Authorised Capital — Incorrect. The limit is measured against the amount issued, not the authorised capital, and the figure is 90%.
Option (3) Should be in the range of 80% to 90% of the Issued capital — Incorrect. There is no range; at least 90% must be subscribed.

NCERT (2026-27 edition):
Minimum Subscription – “… It is to be noted that ‘minimum subscription’ of capital cannot be less than 90% of the issued amount according to SEBI (Disclosure and Investor Protection) Guidelines, 2000 [6.3.8.1 and 6.3.8.2]. If this condition is not satisfied, the company shall forthwith refund the entire subscription amount received.”