Question

Assertion (A): Shares cannot be allotted unless minimum subscription is received.

Reason (R): SEBI has prescribed that a company issuing shares to public cannot allot shares unless it receives subscription of 90% of the shares issued.

In the context of above two statements, which of the below options is correct?

Options

• Assertion (A) and Reason (R) are correct but Reason (R) is not the correct explanation of Assertion (A).

• Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).

• Assertion (A) is false but Reason (R) is true.

• Both Assertion (A) and Reason (R) are false.

Answer 1

Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).