How to solve ' undefined reference ' error when executed 'make' command and get the final output file

Question

I am new to the concept of .so files and makefiles, so please guide me what's wrong in my makefile, when I am executing the make command, it creates .so files but it gives and error saying

/usr/bin/ld: subfolder/srcs/file_name.so: undefined reference to `function_name'

Before showing you the makefile, I would like to give you a glimpse of my folder structure

main_folder/  
├── Makefile  
├── main.c  
├── main.so  
├── subfolder/  
│   ├── includes  
│   |   └─ all required .h files  
│   |  srcs  
│   |   └─ all required .c files   
│   └─  ...  
└── ...  

Now my makefile looks like this:

APP := Test_app
APP_INSTALL_DIR ?= /home

SRCS := main.c
SRCS += $(wildcard subfolder/srcs/*.c)

INCS := $(wildcard subfolder/includes/*.h)

OBJS := $(SRCS:.c=.o)
SOS := $(OBJS:.o=.so)

CFLAGS := -I /usr/lib 

LIBS += -L -lpq -ldl -Wl,-rpath

all: $(APP)

%.o: %.c $(INCS) Makefile
    $(CC) -c -o $@ $(CFLAGS) $<

%.so: %.o Makefile
    $(CC) -shared -o $@ $< $(LIBS)

$(APP): $(SOS) Makefile
    $(CC) -o $(APP) $(SOS) $(LIBS)

install: $(APP)
    cp -rv $(APP) $(APP_INSTALL_DIR)

clean:
    rm -rf $(OBJS) $(APP) $(SOS)

I am not getting what I'm missing and where.