Question

According to Securities and Exchange Board of India (SEBI), guidelines, minimum subscription of capital cannot be less than 90% of ....... 
 

• A. Authorised capital
• B. Subscribed capital
• C. Reserve capital
• D. Issued capital

Hint:

Minimum subscription (90% requirement) applies to the specific amount of capital issued or offered to the public in an issue, not the total authorised capital.

Answer 1

The Correct Option is B

To solve the problem, we need to determine what the minimum subscription of capital cannot be less than 90% of, according to the Securities and Exchange Board of India (SEBI) guidelines.

1. Understanding SEBI Guidelines on Minimum Subscription:
According to SEBI guidelines, the minimum subscription requirement ensures that a company must receive a certain percentage of the capital it offers to the public before proceeding with the allotment of securities. This is to protect investors and ensure the viability of the issue.

2. Identifying the Relevant Term:
SEBI mandates that the minimum subscription for a public issue cannot be less than 90% of the subscribed capital. Subscribed capital refers to the total amount of capital that the company offers for subscription through the public issue, as per the offer document.

Final Answer:
According to Securities and Exchange Board of India (SEBI) guidelines, the minimum subscription of capital cannot be less than 90% of the Subscribed Capital.