Question

What is the correct sequence of allotment of shares
A. Allotment money received 
B. Inviting applications from investors 
C. Allotment Due 
D. Application money Received 
E. Share Call Money Due 
Choose the correct answer from the options given below:

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

Answer 1

The Correct Option is B

In the process of allotting shares, the sequence includes several critical steps. Understanding the order of these steps ensures clarity and proper management in financial transactions related to shares. Here is the correct sequence for the allotment of shares:

1. Inviting applications from investors: Initially, a company invites applications from interested investors for purchasing shares. This is the starting step where potential shareholders are asked to express their interest by submitting applications.
2. Application money received: After inviting applications, the company receives application money from the interested investors, confirming their intention to buy shares.
3. Allotment Due: Next, the company communicates the share allotment to the investors. This includes calculating the amount due for the share allotment above the application money already paid.
4. Allotment money received: Investors then pay the due amount following the allotment notice issued by the company. This payment completes the share allotment process on the financial end.
5. Share Call Money Due: Finally, if there are any remaining calls on the shares, such as additional payments required by the company for share capital, these amounts become due.

Therefore, the correct order of allotment of shares is given by:
B, D, C, A, E.