Question

XY Limited issued 2,50,000 equity shares of ₹10 each at a premium of ₹1 each payable as ₹2.5 on application, ₹4 on allotment and balance on the first and final call. Applications were received for 5,00,000 equity shares but the company allotted to them only 2,50,000 shares. Excess money was applied towards amount due on allotment. Last call on 500 shares was not received and shares were forfeited after due notice. This is a case of:

Options

• Over subscription

• Pro-rata allotment

• Forfeiture of Shares

• All of the above

Answer 1

All of the above

Explanation:

• Oversubscription – Applications were for 5,00,000 shares, but only 2,50,000 could be allotted.

• Pro-rata allotment – Excess money on application adjusted towards allotment.

• Forfeiture of shares – Last call not received on 500 shares, so they were forfeited.