Arrange the important steps in the correct sequence in the procedure of share issue:

(A) Receipt of Applications

(B) Allotment of Shares

(C) Listing of Shares on the Stock Exchange

(D) Issue of Prospectus

Choose the correct answer from the options given below:

When a company issues shares to the public, it follows a specific sequence:

Issue of Prospectus (D) is the first step where the company invites the public to subscribe to its shares. The prospectus contains all necessary information about the company, the issue details, terms and conditions.

After the prospectus is issued, interested investors submit their applications along with the application money. This is the Receipt of Applications (A) stage.

Once the company receives applications, it processes them and decides which applicants will receive shares and in what quantity. This is the Allotment of Shares (B) stage. The company may fully allot, proportionately allot, or reject applications based on the subscription received.

After allotment is complete, the company applies for Listing of Shares on the Stock Exchange (C) so that the shares can be freely traded in the market. This provides liquidity to shareholders.

The correct sequence is: (D) → (A) → (B) → (C)

It's important to note that a company cannot receive applications before issuing a prospectus (as investors need information first), cannot allot shares before receiving applications, and cannot list shares before they are allotted to shareholders.

Answer: Option 3