CA Inter P2 · Chapter 3 · Question 7 of 10
Under section 39(3), if the stated minimum amount has not been subscribed and the sums payable on application have not been received within thirty days from the date of issue of the prospectus, or such other period as SEBI may specify:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) The application money must be returned within the prescribed period
Explanation
Section 39(1) prohibits allotment unless the minimum amount stated in the prospectus has been subscribed and the application money received. Under section 39(3), if this does not happen within thirty days of the issue of the prospectus, or the period specified by SEBI, the amount received must be returned within the prescribed time.
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