Rita itd. issues 500,000 shares Rs. 10 each for public subesciption. Application Along with money was received for 400,000 shares.can company allot these shares? explain.
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Explanation:
The company cannot allot the shares because,
the company didn't received minimum subscription.
minimum subscription=90%(50,00,000 shares × 10 rupees each share)
90%each share(50,00,000) = 45,00,000
amount received = 4,00,000 share ×10 rupees each = 40,00,00,000
amount received is less than minimum subscription
therefore, the company cannot allot the share
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