Skip to content

CS Professional · Strategic Management and Corporate Finance · Raising of Funds - Private Funding

Kaveri Textiles Ltd received private placement application money on 1 March. It could not allot the securities within the permitted period. By which date must it refund the money to avoid the liability to pay interest at twelve per cent per annum, taking the sixty days as expiring on 30 April?

The company must repay the application money within fifteen days from the expiry of the sixty-day allotment period. If it fails to do so, it is liable to repay with interest at twelve per cent per annum from the expiry of the sixtieth day.

  1. AWithin fifteen days from 30 AprilCorrect
  2. BWithin thirty days from 30 April
  3. CWithin fifteen days from 1 March
  4. DWithin sixty days from 30 April

Explanation

Section 42(6) allows repayment within fifteen days from the expiry of the sixty days. If the company fails, interest at twelve per cent per annum runs from the expiry of the sixtieth day. Thirty days is the refund period after a penalty order under sub-section (10), not this one.

Did you get it right without looking?

One question tells you little. A timed set on Raising of Funds - Private Funding shows your real accuracy, how long you take and where you lose marks.

Practise Raising of Funds - Private FundingFree diagnostic mock

More Raising of Funds - Private Funding questions