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2 . F i l i n go fP r o s p e c t u s
2.57
of the prospectus or statement in lieu of
Companies. It e on the basis of the
A copy same is
invest in a information given byfiled with the
Registrar of
this document,
i n v e s t o r s decide to company. Therefore, it is essential that the
provides.
all formation and must not contain
significant info that this document
ointment of Bankers, Brokers and any misleading
Underwriters statement.
of raising funds the
The
ne
task
from public is very difficult. Bankers of
application money, while the brokers try to sell the shares. the company
appointedby the company hen it is not
An underwriter is also
assure of
ohurn for some commission undertakes to buy the good public response. Underwriter
subscribed by the public. shares in case they are not
fully
4. Minimum Subscription
fors to the application for a certain minimum number of
shares that a
receive before going ahead with the allotment of shares. company must
Act the minimum subscription should be 90% of the sizeAccording
to the Companies
of the issue. Therefore, the
company should not allot the shares and should return the
applications received are less than 90% of the total issue. application money, if the
5. Application to Stock Exchange
The company files an application to at least one stock
exchange for permission to deal in
the shares or debentures of the company. The allotment shall become void if permission
is not granted before the expiry of 10 weeks from the date of closure of
In such a case the application money received is also returned to the
subscription list.
applicants within
eight days.
6. Allotment of Shares
Thecompany returns the application money to the persons to whom no share is allotted
bythe company. While the person to whom less number of shares is allotted, the excess
application money is either returned or adjusted towards allotment money.orSuccessful
allottees
are letters. Return of allotment, signed by a director secretary
given allotment
ISfiled with the registrar of companies within 30 days of allotment.