Chapter 3 – Issue of Shares.

Chapter 3, Issue of Shares, SP, secretarial practice, hsc, Maharashtra, board, new edition, ebalbharathi, solution,

Correct the underlined word and rewrite the following sentence.

1.Issued capital is the maximum capital which a company can raise by issuing shares.

SOLUTION

Authorised capital is the maximum capital which a company can raise by issuing shares

2.Under Fixed price issue method, the price of shares is fixed through bidding process

One line Answer

SOLUTION

Under book building method the price of shares is fixed through bidding process.

3.FPO refers to offering of shares to the public for the first time.

SOLUTION

IPO refers to offering of shares to the public for the first time.

4.Only fully paid up shares can be forfeited.

SOLUTION

Only partly paid shares can be forfeited.

5.Bonus shares are offered to existing employees of a company.

SOLUTION

Bonus shares are offered to existing equity shareholders of a company.

6.Company enters into an underwriting agreement with the shareholders.

One line Answer

SOLUTION

Company enters into an underwriting agreement with the underwriters.

7.Letter of Allotment is sent to applicants when no shares are allotted to them.

One line Answer

SOLUTION

Letter of Regret is sent to applicants when no shares are allotted to them.

8.Duplicate share certificate must be issued within one month from date of application.

SOLUTION

Duplicate share certificate must be issued within three months from date of application

9.Call money cannot exceed 5% of nominal value of shares.

SOLUTION

Call money cannot exceed 25% of nominal value of shares.

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