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What is the correct sequence of allotment of shares
A. Allotment money received
B. Inviting applications from investors
C. Allotment Due
D. Application money Received
E. Share Call Money Due
Choose the correct answer from the options given below:
  • a)
    E, C, A, B, D
  • b)
    A, B, C, D, E
  • c)
    B, D, C, A, E
  • d)
    C, A, E, D, B
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
What is the correct sequence of allotment of sharesA. Allotment money ...
The correct sequence of allotment of shares is option C: 
B. Inviting applications from investors:
  • - The company invites potential investors to apply for shares through a prospectus or offer document.
  • - This step is essential in the initial public offering (IPO) process, where a company issues its shares to the public for the first time.
D. Application money received:
  • - After the investors submit their applications, the company receives the application money.
  • - This money represents the investors' interest in purchasing the shares and is usually a part of the total share price.
C.  Allotment Due:
  • - After receiving the applications and the application money, the company proceeds with the allotment process.
  • - The allotment process involves determining the number of shares to be allotted to each applicant, which could be based on the proportion of the shares applied for or a fixed number of shares for each applicant.
A. Allotment money received:
  • - After the allotment is finalized, the investors are required to pay the allotment money.
  • - The allotment money is the remaining portion of the share price after deducting the application money.
E. Share Call Money Due:
  • - In some cases, the company may require investors to pay the share price in installments.
  • - Share call money is an additional amount due from the investors after the allotment money has been paid.
  • - The company may make calls for the unpaid amount at any time before the shares are fully paid.
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What is the correct sequence of allotment of sharesA. Allotment money ...
Correct sequence of allotment of shares:

The correct sequence of allotment of shares is as follows:

1. Inviting applications from investors (B):
The first step in the allotment process is to invite applications from investors. This is done through various means, such as public announcements, advertisements, or private placements. Investors are provided with the necessary information about the company and the shares being offered, including the application procedure and the timeline for allotment.

2. Application money received (D):
Once the applications are received, the company collects the application money from the investors. This is the initial payment made by the investors to express their interest in purchasing the shares. The amount of application money may vary depending on the terms and conditions set by the company.

3. Allotment due (C):
After the application money is received, the company reviews the applications and determines the allotment due. Allotment due refers to the number of shares that can be allotted to each investor based on the availability and demand. The company may have certain criteria for allotment, such as giving preference to existing shareholders or institutional investors.

4. Allotment money received (A):
Once the allotment due is determined, the company sends out allotment letters to the investors who have been allocated shares. The investors are then required to pay the allotment money, which is the remaining balance of the share price after deducting the application money already paid. This payment confirms the investor's acceptance of the allotted shares.

5. Share call money due (E):
After the allotment money is received, the company may require the investors to make further payments known as share call money. This is the remaining unpaid portion of the share price. The company sets a due date for the share call money, and investors are expected to make the payment within the specified time frame.

Conclusion:
The correct sequence of allotment of shares is as follows: B - D - C - A - E. Inviting applications from investors is followed by the collection of application money. Then, the company determines the allotment due and collects the allotment money. Finally, if required, the company may ask for share call money from the investors.
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