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Home Questions HH4X8G4XTP
Target Exam

CUET

Subject

Accountancy

Chapter

Accounting for Shares

Question:

Match the following-

LIST 1 LIST 2
A) Maximum no of members in public company I) 90% of the Issued amount
B) Minimum no of members of private company II) 2
C) Minimum Subscription III) Any no of members
D) Application Money should be at least IV) 5% of face value

Choose the correct answer from the options given below.

Options:

A-II, B-III, C-IV, D-I

A-III, B-II, C-I, D-IV

A-II, B-III, C-I, D-IV

A-III, B-II, C-IV, D-I

Correct Answer:

A-III, B-II, C-I, D-IV

Explanation:

The correct answer is option 2- A-III, B-II, C-I, D-IV.

LIST 1 LIST 2
A) Maximum no of members in public company III) Any no of members
B) Minimum no of members of private company II) 2
C) Minimum Subscription I) 90% of the Issued amount
D) Application Money should be at least IV) 5% of face value

 

* Maximum no of members in a public company- In a public company, there should be 7 minimum members and no limit of maximum.

* Minimum no of members of a private company- A private company is one which by its articles of association:
(a) Restricts the right to transfer its shares.
(b) A private company must have at least 2 persons, except in the case of one person company.
(c) Limits the number of its members to 200 (excluding its employees).

* Minimum Subscription- The company is required to attain a minimum subscription within 120 days from the issuance of the prospectus. If this requirement is not met within the specified time frame, the company cannot proceed with the allotment of shares, and it must refund the application money within 130 days from the prospectus issuance date. It's important to note that as per SEBI (Disclosure and Investor Protection) Guidelines, 2000 [6.3.8.1 and 6.3.8.2], the minimum subscription of capital cannot be less than 90% of the total amount offered.

* Application Money should be at least- Application money should be at least 5% of the face value of the share. For e.g. if a share having a face value of ₹100 is issued then a minimum ₹5 must be collected by the company on application.

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