Arrange in correct sequence.

(A) Receipt of application money
(B) Amount due on allotment and received
(C) Reissue of shares (already forfeited)
(D) Forfeiture of shares
(E) Allotment of shares and application money transferred to share capital A/c

Choose the correct answer from the options given below :

(A), (E), (B), (D), (C)

The correct answer is Option (3) - (A), (E), (B), (D), (C).

* Receipt of Applications: Prospective investors who wish to purchase shares in the company submit applications along with the application money. The application money is deposited into a scheduled bank as specified in the prospectus. The company must receive the minimum subscription amount within 120 days of issuing the prospectus. If the company does not receive the minimum subscription amount within this time period, it cannot proceed with the allotment of shares and must return the application money to investors within 130 days of issuing the prospectus.

* Allotment of Shares: If the company receives the minimum subscription amount, it may proceed with the allotment of shares after fulfilling certain legal formalities. The company sends letters of allotment to investors who have been allocated shares and letters of regret to investors who have not been allocated shares. Once shares have been allotted, a valid contract is formed between the company and the investors, who are now shareholders of the company. After allotment of shares, share application money is transferred to share capital A/c.

* Amount due on allotment and received- The company call the allotment money from the shareholders who have allotted the shares and received the due amount on allotment.

* Forfeiture of shares: If the calls in arrears are not paid within the stipulated time, the company may decide to forfeit the shares of the defaulting shareholders. The company typically issues a notice to shareholders to inform them about payment otherwise there shares will be forfeited. Forfeiture involves canceling the shares and removing the shareholder's rights.

* Reissue of shares : After the forfeiture of shares, the company has the option to reissue these forfeited shares to new shareholders. This process helps the company recover the value of the unpaid calls.