Abc invited general public to subscribefor its public issue of rs 1crore through issue of propectus . Howere the company was unable to receive the minimum subscription .Can the company proceed with alllotment of shares ? Justify
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if minimum subscription has not received the company can not take the next step
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Raj, whether Smart Ltd. can proceed with allotment or not is question based upon the amount that has been stated as minimum subscription in the prospectus of the company. In case, Smart Ltd. has specified any amount lesser than 45 lakh as the minimum subscription then they can proceed with allotment of shares to the applicants. This is because of Section 39 (1) of Companies Act, 2013 that states that Minimum Subscription is the amount stated in the prospectus as the minimum amount that must be subscribed. However, earlier it was specified that 90% is minimum subscription amount but same clause has been removed with the applicability of new act.
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