Laksha Limited issued prospectus, inviting people to subscribe for its shares. It came up with public issue for 130 crores of 30 lakh shares worth Rs 100 each. It received applications for 15 lakh shares. Should the company proceed with allotment of shares.
Subscribed capital is that part of issued capital which has been actually subscribed for by the public,.In case the company has received applications for only 15 lakh shares. This would mean that a company would not proceed with allotment of shares. It can only be proceed with allotment. When the amount of minimum subscription (90 % of total issue) has been received by the company. In this case allotment cannot be made and application money received must be returned to applicants.
According to Companies Act minimum subscription has been fixed at 90 % of the issued amount. The company has to get minimum subscription within 120 days from the date of the issue of the prospectus. If the company fails to receive the minimum subscription within the said period, the company cannot proceed for the allotment of shares and the entire application money must be
returned within 130 days of the date of issue of the prospectus. If there is a delay in refund of such amount by more than 8 days after the company becomes liable to pay the amount, the company shall be liable to repay it with interest at the rate of 15 % per annum for the delayed period.