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CS Executive · Capital Market and Securities Laws · Issue of Capital and Disclosure Requirements

Under the Companies Act, 2013, the amount payable on application for each security offered to the public must not be less than a stated minimum unless SEBI specifies otherwise. What is that minimum?

The amount payable on application must be at least five per cent of the nominal amount of the security, or such other percentage or amount as SEBI may specify by regulations. Ten or twenty-five per cent is not the statutory minimum.

  1. ATen per cent of the nominal amount of the security
  2. BTwenty-five per cent of the nominal amount of the security
  3. CFive per cent of the nominal amount of the securityCorrect
  4. DOne per cent of the nominal amount of the security

Explanation

Section 39(2) says the application amount on every security shall not be less than five per cent of its nominal amount, or such other percentage or amount as SEBI specifies by regulations. The other percentages are not the statutory floor.

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