other expenditure, stating the nature and purpose

The objective of the Minimum Subzero Jettison provision is to prevent any company to commence business unless adequate resources are available to give it

a good start.

The amount of minimum subscription excludes amount of ?’lY shares

allotted for consideration otherwise than in cash.

If the minimum subscription is not received by the company within 12

days of the first issue of prospectus, the company must return the

received on application within 130 days from the date offirst issue of prospectus (i.e. within the next 10 days) to the applicants; otherwise, the directors of

the company are jointly and severely liable to pay the amount to the applicants with 6% p.a. interest from the 13 1^st day, unless they prove that it was not

due to any negligence or misconduct on their part (Sec. G9 (5)].

Howcver, the SEBI guidelines arc inconsistent to the provisions of the Companies Act. According to SEBI guidelines, it has been obligatory upon the

companies making public issues to make a declaration in the prospectus that the company docs not receive minimum subscription of 90 per cent of the

entire issue within GO days from the date of closure of issue. the entire amount collected on application shall be refunded forthwith to the applicants within

78 days from the date of closure of issue, and in case of default, they will pay interest for the delayed period at 15% p.a.

4. Money to be kel)t in a Scheduled Bank (Section 69). All moneys received by the company as ‘Application Money’ must be deposited and kept deposited