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What is meant by minimum subscription.

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What is meant by minimum subscription.

Posted by Khushi Kumari 6 years, 5 months ago

CBSE > Class 11 > Business Studies

1 answers

Yogita Ingle 6 years, 5 months ago

Minimum subscription refers to the minimum amount required by the company for its preliminary functions. It has been provided by the Companies Act, that the company must receive applications for a certain minimum number of shares before going ahead with the allotment of shares in order to prevent companies from commencing business with inadequate resources. This is called the ‘minimum subscription’. The limit of minimum subscription is 90% of the size of the issue.

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