Section 39 of the Companies Act, 2013
Section 39 of the Companies Act, 2013 deals with the allotment of securities by a company and what happens when the minimum subscription is not received.
📘 Section 39 – Allotment of Securities by Company
(1) A company making a public offer shall not allot securities unless the minimum subscription amount stated in the prospectus is received within 30 days (or a time as prescribed by SEBI) from the issue.
🔹 If minimum subscription is not received, the application money must be refunded within the prescribed time.
(2) If the company fails to refund the application money within such time:
It shall be liable to repay that money with interest at a prescribed rate.
(3) The return of allotment (i.e., details of shares allotted) must be filed with the Registrar in such manner and within such time as may be prescribed.
(4) If a company fails to file the return of allotment:
The company and every officer in default shall be liable to penalty, which may extend up to ₹1,000 for each day of default, subject to a maximum of ₹1,00,000.
✅ Key Points:
Allotment allowed only after receiving minimum subscription.
Refund with interest if not subscribed within the time.
Mandatory filing of return of allotment with RoC.
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