Minimum subscription
anshul sangal
(Querist) 21 January 2010
This query is : Resolved
Can somebody define minimum subscription in simple language?What is purpose of minimum subscription under company law?
A V Vishal
(Expert) 21 January 2010
No allotment shall be made of any share capital of a company offered to the public for subscription, unless the amount stated in the prospectus as the minimum amount which, in the opinion of the Board of directors, must be raised by the issue of share capital in order to provide for the matters specified in clause 5 of Schedule II has been subscribed, and the sum payable on application for the amount so stated has been paid to and received by the company, whether in cash or by a cheque or other instrument which has been paid."
In simple words, we can say that when a company offer shares to public, they offer many shares , however they set a specific amount to be subscribed by the public in order to issue the shares, otherwise they can not issue the shares (IPO, Initial Public Offer)
Minimum subscription is the amount of the issue which must be subscibed of the issue otherwise shares can't be issued.
