Correct steps in the procedure of issue of shares are-

(A) Allotment of Shares

(B) Calls in Arrears

(C) Issue of Prospectus

(D) Receipt of Applications

Choose the correct answer from the options given below:

The correct sequence of steps in the procedure of issue of shares follows this logical order:

1. Issue of Prospectus (C): The company first invites the public to subscribe to its shares by issuing a prospectus. This document contains all material information about the company, terms of issue, and rights attached to shares.

2. Receipt of Applications (D): After the prospectus is issued, interested investors submit their applications along with application money to apply for shares. Applications are received and processed by the company.

3. Allotment of Shares (A): The Board of Directors considers the applications and allots shares to applicants. After allotment, applicants become shareholders of the company.

4. Calls in Arrears (B): After allotment, the company makes subsequent calls (Allotment Call, First Call, Final Call, etc.) to collect the remaining amount on shares. When shareholders fail to pay these calls on due dates, it results in Calls in Arrears.

The natural flow is: Company invites public → Public applies → Company allots → Calls are made (and arrears may arise)

Correct Answer: Option 1: (C), (D), (A), (B)