Minimum Subscription [2019 - 4 marks]
Minimum Subscription
Minimum subscription refers to the minimum amount which a company should raise at the time of issuing capital. Section 26(a)(xii) of the Companies Act mandates that the minimum subscription should be a part of the Prospectus. It has been provided by the Companies Act, that the company must receive applications for a certain minimum number of shares before going ahead with the allotment of shares in order to prevent companies from commencing business with inadequate resources.
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