Question : What is the Minimum Subscription in case of Public Company?
Option 1: 75% of the Issue size
Option 2: 90% of the Issue size
Option 3: 50% of the Issue size
Option 4: None of the Above
Correct Answer: 90% of the Issue size
Solution : The term "minimum subscription" refers to the lowest sum needed by the business to perform its initial duties. The Companies Act stipulates that to prevent businesses from starting with insufficient funds, the company must receive applications for a specific minimum number of shares before moving on with the allotment of shares. The phrase "minimum subscription" refers to this. The minimum subscription amount cannot be less than 90% of the issue's size.
Hence the correct answer is option 2.
