Can a company allot more debentures than it has invited for subscription in case of oversubscription?
Answer & explanation
Correct answer: option 2
The correct answer is option 2- No, it cannot allot more debentures than it has invited for subscription.
When the number of debentures applied for is more than the number of debentures offered to the public, the issue is said to be over subscribed. A company, however, cannot allot more debentures than it has invited for subscription. The excess money received on over subscription may, however, be retained for adjustment towards allotment and the respective calls to be made. But the money received from applicants to whom no debentures have been allotted, will be refunded to them.