Question

Find the correct sequence of procedure of issue of shares :
(A) Receipt of Applications
(B) Issue of prospectus
(C) Allotment of Shares
(D) Making call money due
(E) Receiving Call money
Choose the correct answer from the options given below :

• A. (A), (B), (C), (D), (E)
• B. (B), (A), (C), (D), (E)
• C. (B), (C), (D), (A), (E)
• D. (B), (D), (A), (C), (E)

Hint:

Each stage that passes the Share to another individual has to be identified with utmost care.

Answer 1

The Correct Option is B

This question tests knowledge of the standard process a company follows when issuing shares to the public.
Issue of Prospectus (B): A prospestus is issued first, before any activity that includes shares.
This prospectus provides all relevant details to prospective investors.
Receipt of Applications (A): Then, Application is received as a application of interest and request is received.
Based on the prospectus, interested investors submit their applications with the required application money.
Allotment of Shares (C): Shares are allotted to the shares, after a proper analysis of requests received.
Making Call Money Due (D): Then, after the allocation now call money can be claimed and demanded.
Receiving Call Money (E): And After asking the amount is finally Received. From the following logic it is right to suggest (B), (A), (C), (D), (E).