(a) When an entire issue is fully underwritten by a single underwriter:In case, an issue is subscribed fully by the public, the underwriter is relieved from the clutches of any liability. Otherwise, if an issue is not subscribed entirely, the underwriter has to shoulder the liability for the members of shares or debentures that are …
Illustration 2.2Model: Issue of both shares and debentures underwritten by one underwriter Veer Ltd. issued 5,000 equity shares of 100 each and 5,000 10% debentures of 100 each. The debentures were issued at a discount of 8%. The whole of the issue was underwritten by M/s Durai & Co. for a commission of 2.5% on …
When a company issues shares, it should receive the amount of minimum subscription as mentioned in the prospectus. According to the provisions of Section 69 (1) of the Companies Act, the minimum subscription should not be less than 90% of the issue value. It should be received within 120 days from the date of opening …
