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:

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

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

The important steps in the correct sequence in the procedure of share issue are as follows-

(D) Issue of Prospectus- The company issues a prospectus to the public, which is a document that provides information about the company and the shares it is issuing. The prospectus is an invitation to the public to subscribe to the shares.

(A) 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.

(B) 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 the 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 the allotment of shares, share application money is transferred to share capital A/c.

(C) Listing of Shares on the Stock Exchange- Once shares are allotted, the company seeks to list its shares on a recognized stock exchange. Listing allows shares to be traded publicly in the stock market. The company must fulfill requirements of the stock exchange.