Practicing Success
What is the minimum amount called that must be subscribed by the public? |
Maximum subscription Minimum subscription Pro-rata allotment of shares Under subscription |
Minimum subscription |
Minimum subscription refers to the minimum amount which a company should raise at the time of issuing capital. The requirement for minimum subscription applies to all companies which raise funds from the public. The company may successfully procure the amount of minimum subscription. In such circumstances, the company is allowed to retain the capital, which has been collected from the investors. Alternatively, the company may not be able to obtain the minimum subscription successfully. Hence, according to the Companies Act, there is an inadequacy in the minimum subscription. In such cases, the company should refund the application deposit. The provisions relating to minimum subscription are available in Section 39 of the Companies Act. |