Arrange the important steps in the correct sequence in the procedure…

Arrange the important steps in the correct sequence in the procedure of share issue.

(A) Receipt of Applications
(B) Allotment of Shares
(C) Listing of Shares on the Stock Exchange
(D) Issue of Prospectus

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → (D), (A), (B), (C)

The steps of a share issue follow one another in time:

(D) Issue of Prospectus — the company invites the public to subscribe.
(A) Receipt of Applications — investors apply with application money, deposited in a scheduled bank.
(B) Allotment of Shares — once minimum subscription is received, the directors allot the shares.
(C) Listing of Shares on the Stock Exchange — only shares already allotted can be listed and traded, so listing comes last.

NCERT (2026-27 edition):
Issue of Shares – “… The important steps in the procedure of share issue are : • Issue of Prospectus: The company first issues the prospectus to the public. Prospectus is an invitation to the public that a new company has come into existence and it needs funds for doing business.”

NCERT (2026-27 edition):
Issue of Shares – “… • Receipt of Applications: When prospectus is issued to the public, prospective investors intending to subscribe the share capital of the company would make an application along with the application money and deposit the same with a scheduled bank as specified in the prospectus.”

NCERT (2026-27 edition):
Issue of Shares – “… Allotment of Shares: If minimum subscription has been received, the company may proceed for the allotment of shares after fulfilling certain other legal formalities. Letters of allotment are sent to those whom the shares have been alloted, and letters of regret to those to whom no allotment has been made.”