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of <h1>Section 372: Public Companies Subscribing to New Company Memorandums Must Comply with Shareholding Limits and Registration Rules.</h1> A circular dated December 12, 1962, addresses the applicability of section 372 to a company's subscription to the memorandum of association of a new company through its nominees. It clarifies that when an existing public company or its nominees subscribe to the memorandum, it is considered as subscribing for shares, thereby invoking section 372. Subscribers automatically become members and holders of shares upon registration, without requiring allotment. If the shares subscribed by a company exceed the percentage limits in section 372(2), compliance with section 372(4) is necessary before the new company can be registered. The subscribed capital is determined by the total shares agreed upon by all signatories.
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