Question

What is meant by minimum subscription

Answer 1

Here is your answer :

The minimum subscription is that number of shares on which amount received from shareholders is sufficient from the point of view of directors. It is the term used to represent the amount of the issue which has to be subscribed or else the share can't be issued if it is not been subscribed. It also refers to min. amount required by the company for its preliminary functions.

According to SEBI , minimum subscription is 90 % of the total issue. The companies act of 1956 created a legal precedent for this , stating that a company can only offer a certain number of shares to the public that the company actually pay for , in the event that the shares are cashed in by the buyers.

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