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. Issued capital
• C. Reserve capital
• D. Subscribed 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

Step 1: Understand Minimum Subscription:
Minimum subscription is the threshold (percentage) of shares offered in an issue that must be subscribed for the company to proceed with allotment.
Step 2: Recall SEBI/Companies Act Rule:
SEBI regulations and Section 39 of the Companies Act, 2013, stipulate that minimum subscription must be received. SEBI specifies this as 90\% of the *issue size* (i.e., the capital offered to the public).
Step 3: Identify the Base for 90\%:
The capital offered to the public for subscription in a particular issue is the Issued Capital.
Therefore, the minimum subscription is 90\% of the Issued Capital.
Conclusion:
Minimum subscription must be at least 90\% of the Issued Capital.