Chapter III
PROSPECTUS AND ALLOTMENT OF SECURITIES
1 A prospectus shall be filed with the Registrar within __________
after the date on which a copy of the prospectus is delivered to
the Registrar.
2 A private company cannot issue securities by the way of
___________
3 persons is disqualified from acting as an 'Expert' with reference
to issue of prospectus if
__________________________________________________
________________________
4 Offer of Sale of Shares by Certain Members of Company
[Sec. 28] – Where certain members of a company propose
whole or part of their holding of shares to the public, in
consultation with the BOD and through _________________
5 Sec. 28 is not applicable the provisions relating to minimum
______________ and ______________
6 Public offer of Securities to be in Dematerialised Form [Sec.
29]
a. every company making ______________ offer ; and
b. _____________________ Company companies as may
be prescribed,
Shall issue the securities only in dematerialised form
7 The shelf prospectus shall remain valid for period not
exceeding ____________ from the date of ____________ of
the first offer
8 The term ______________________________ means a
prospectus which does not include complete particulars of the
quantum or price of the securities included therein.
9 A company proposing to issue a red herring prospectus shall file
it with the Registrar at least ____ days prior to the opening of
the offer.
10No form of application for the purchase of any of the securities
of a company shall be issued unless such form is accompanied
by an __________________ Prospectus.
11Unless contrary is proved, it shall be presumed that allotment
or agreement to allot the securities as made with a view to the
securities being offered for sale to the public if it is shown:
(a) that the offer for sale to the public was made within
_____________ of allotment or agreement to allot; or
(b) that the whole consideration had _____________
received by the company when the offer for sale to the
public was made.
12The document by which the offer is made, must be signed:
(i) In case of company : by _________ directors of the
company;
(ii) In case of firm: by at least ________ of the partners in the
firm.
13Name Case laws –
a. If a person buys shares from another shareholder or
from open market/secondary market / stock exchange,
he cannot claim damages. –
b. Suppression of material fact, however remote will make the
prospectus misleading –
c. Remedy is available to original allottee only –
d. Remedy is available to such allottee to whom personal loss
has been caused –
14Any person or group of persons or association of persons may
file a suit or any __________ action may be taken u/s 34 or 35
or 36
15Protection against criminal liability –(sec 35)
a. If he proves that such statement or omission was
________________; or
b. He had reasonable grounds to ____________upto the time
of issue of the prospectus that the statement was true or
the inclusion or omission was necessary.
16Protection against civil liability (sec 36)
a. If he proves that, he ________________________ before
the issue of the prospectus
b. that the prospectus was issued without his
_______________________, and that on becoming aware
of its issue, he immediately gave a
____________________ that it was issued without his
knowledge or consent.
c. A person who makes any statement on the basis of report
of an _______________
17The application money on every security shall not be less than
at least:
18Minimum subscription
a. If the amount stated in the prospectus as the minimum
subscription is not subscribed or the sum payable on such
application is not received within ______________ of
issue of prospectus, then, such money shall be repaid
within a period of ________ days from the closure of
the issue.
b. If such money is not repaid within such period, the directors
of the company who are officers in default shall jointly and
severally be liable to repay that money along with interest
at the rate of __________ p.a.
19Whenever a company having a share capital makes any
allotment of its securities, the company shall file a return of
allotment with Registrar in Form PAS-____ within ______
days from allotment, along with the prescribed fees
20Every company shall, before making public offer, make an
application to one or more ________________________ and
obtain permission for the securities to be dealt with in such stock
exchange.
21All monies received on application from the public for
subscription to the securities shall be kept in a separate bank
account in a scheduled bank and shall be utilised only for:
Underwriting Commission [Sec. 40(6) & Rule 13]
Source The commission may be paid out of proceeds of
the ___________ or out of the ____________ of
company or both.
Rate of Types of Rate of commission
commission securities
issued
Shares (whether Lower of-
equity or (i) ________ of issue price of
preference) shares; or
(ii)rate authorised by the
articles
Debentures Lower of-
(i) ___________of issue price
of debentures; or
(ii) rate authorised by the
articles
Other (i) No underwriting commission shall be paid
compliances on securities which are ___________
(ii) A copy of the underwriting agreement shall
be delivered to the Registrar
___________filing of a copy of the
prospectus with the Registrar.
22Private Placement (Sec. 42)
(i) Maximum _________ in a F.Y. [individual limit for each
________ of security (equity share, preference share or
debenture.)]
excluding:
(a) ___________________________________; and
(b) Employees of the company who have been offered
securities under a scheme of
__________________________ u/s 62(1)(b).
23No fresh offer unless
a. the allotments have been ________________; or
b. such offer or invitation has been ______________ or
____________________
24Time Limit
a. A company making private placement shall allot the
securities within ______________ of receiving the
___________________ money for the securities.
b. If the company is not able to allot the securities within the
said period of 60 days, it shall, within next
________________, repay the application money to the
applicants.
c. If the company fails to repay the application money within
the said period of 15 days, it shall be liable to pay interest
@_________% per annum from the expiry of 60th day.
25The company is prohibited from providing ‘Right of
___________________’ and therefore, the letter of offer and
the application form need not include any such clause.
