Match List-I with List-II.List - IList - IIMinimum Subscription(I) Fundamental provisions & important clause of company’s constitutionProspectus(II) 90% of issued amount according to SEBIReserve Capital(III) Invitation to the public for Subscription of sharesMemorandum of Association(IV) Reserved portion of uncalled capitalChoose the correct answer from the given below:

Question

Prepp Team · Accepted Answer

Matching Company Law Terms: Minimum Subscription, Prospectus, MOA

The question asks us to match important terms related to company law and formation from List-I with their corresponding definitions or descriptions in List-II. Let's analyze each term in List-I and find its correct match in List-II.

Analyzing List-I and List-II Terms

Minimum Subscription: This refers to the minimum amount of capital that a company must receive through share subscriptions before it can proceed with the allotment of shares. SEBI (Securities and Exchange Board of India) regulations often specify this amount. Looking at List-II, option (II) states "90% of issued amount according to SEBI", which is the standard definition for minimum subscription in many contexts involving public issues.
Prospectus: This is a formal legal document that provides details about an investment offering for sale to the public. It invites the public to subscribe to shares or debentures of the company. Looking at List-II, option (III) states "Invitation to the public for Subscription of shares", which accurately describes the primary purpose of a prospectus.
Reserve Capital: This is a special portion of the uncalled share capital of a company that a company resolves not to call up except in the event of the company being wound up. Looking at List-II, option (IV) states "Reserved portion of uncalled capital", which precisely defines reserve capital.
Memorandum of Association (MOA): This is the fundamental document of a company, often considered its charter. It contains the basic rules and objectives that govern the company's operations and defines its relationship with the outside world. Looking at List-II, option (I) states "Fundamental provisions & important clause of company’s constitution", which is a perfect description of the Memorandum of Association.

Establishing the Correct Matches

Based on the analysis above, the correct matches are:

Minimum Subscription (A) matches with (II)
Prospectus (B) matches with (III)
Reserve Capital (C) matches with (IV)
Memorandum of Association (D) matches with (I)

Summary of Matches

List-I (Term)	List-II (Description)	Match
(A) Minimum Subscription	(II) 90% of issued amount according to SEBI	A - II
(B) Prospectus	(III) Invitation to the public for Subscription of shares	B - III
(C) Reserve Capital	(IV) Reserved portion of uncalled capital	C - IV
(D) Memorandum of Association	(I) Fundamental provisions & important clause of company’s constitution	D - I

Comparing these matches with the given options, we find that the combination (A)-(II), (B)-(III), (C)-(IV), (D)-(I) is the correct one.

Revision Table: Company Law Definitions

Term	Key Definition/Purpose
Minimum Subscription	Minimum amount needed from share applications for allotment; often set by regulators like SEBI (e.g., 90% of issue size).
Prospectus	Document inviting the public to subscribe for shares/debentures, containing details about the company and offer.
Reserve Capital	Part of uncalled share capital set aside specifically to be called only during the company's winding up.
Memorandum of Association	Foundational constitutional document outlining the company's name, objectives, capital structure, and liability.

Additional Information: Key Company Documents and Capital Concepts

Understanding these terms is crucial for comprehending how companies are formed and operate, especially public companies raising funds.

Articles of Association (AOA): While the Memorandum of Association defines the company's external scope, the Articles of Association contain the internal rules and regulations for the management of the company's affairs. It deals with matters like the appointment of directors, conduct of meetings, transfer of shares, etc. The AOA is subordinate to the MOA.
Types of Share Capital:
- Authorised Capital: The maximum amount of share capital a company is authorised to issue by its Memorandum of Association.
- Issued Capital: The portion of authorised capital that the company has offered to the public for subscription.
- Subscribed Capital: The portion of issued capital that the public has applied for and agreed to take.
- Called-up Capital: The portion of subscribed capital that the company has asked shareholders to pay.
- Paid-up Capital: The portion of called-up capital that shareholders have actually paid.
- Uncalled Capital: The portion of subscribed capital that has not yet been called up by the company. Reserve Capital is a part of this uncalled capital, specifically set aside.
SEBI Guidelines: For public issues in India, SEBI plays a crucial role in regulating the process, including setting norms for minimum subscription and vetting the prospectus to ensure transparency and investor protection.

These concepts are interconnected and form the backbone of a company's structure and public fundraising activities.

Prepp Team · Answer

(A)-(IV), (B)-(III), (C)-(II), (D)-(I)

Prepp Team · Answer

(A)-(III), (B)-(IV), (C)-(I), (D)-(II)

Prepp Team · Answer

(A)-(I), (B)-(II), (C)-(III), (D)-(IV)

List-I (Name of account to be debited or credited, when shares are forfeited)	List-II (Amount to be debited or credited)
(A) Share Capital Account	(I) Debited with amount not received
(B) Share Forfeited Account	(II) Credited with amount not received
(C) Calls-in-arrears Account	(III) Credited with amount received towards share capital
(D) Securities Premium Account	(IV) Debited with amount called up