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Prospectus
2 (36) "prospectus" means any document described or issued as a prospectus and
includes any notice, circular, advertisement or other document inviting deposits
from the public or inviting offers from the public for the subscription or purchase
of any shares in, or debentures of, a body corporate
Prospectus is a document which invites deposits from the public or invites offers
from the public to subscribe or buy the shares or debentures of the company.
Prospectus is not an offer but an invitation to offer
Application for purchase of shares/deposits is an offer from the applicant and the
company may accept or refuse to accept the same.
If the company accepts the offer then a binding contract comes into existence

The prospectus must be in writing .Any oral invitation is not valid

Invitation to public-Meaning
A document can be considered as a prospectus only when it invites offers from the
public.

The term public includes any section of the public whether selected as members or
debenture holder of the company concerned or as clients of the person issuing the
prospectus or in any other manner.( Sec 67 (1) and (2))
No offer or invitation shall be treated as made to the public in either of the
following 2 circumstances
i) It is not calculated to result in the shares /debentures becoming available
by persons other than those receiving the offer invitation.
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ii) If it can be regarded as being the domestic concern of the persons making
and receiving the offer or invitation.
To test whether an offer is a public offer -the test is not who receives the offer or
invitation but who can accept it.
If the invitation can be accepted by anyone whether the prospectus is addressed
him or not then it is public offer.
But it can be accepted only by the person to whom the same is addressed then it is
not a public offer.
a) An offer by directors to few friends , relatives , customers by sending them
a copy of the prospectus marked not for publication was not considered
an offer to the public.
b) An offer to the kith and kin of the director is not a public offer
c) A single private communication does not amount to an invitation to the
public.
d) If the communication is marked strictly private and confidential is not an
invitation to the public.
When an offer is not treated as a private issue?
If an offer is made to 50 or more persons , then it is not treated as a private issue.
But this not applicable to
i) Non-Banking Finance Companies referred to in Section 45-I of the RBI
Act.
ii) Public Financial Institutions as defined in Section 4A of the Companies
Act, 1956.

Subscription or Purchase of Shares
Means taking or agreeing to take shares for cash.

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Section 68B-
Every listed company , making initial public offer or any security for a sum of Rs
10 crores or more shall issue the same only in dematerialized form by complying
with the provisions of the Depositories Act, 1996.
Importance of the Prospectus
i) Invitation by the company to the public to purchase its shares or
debentures or make deposits with the company.
ii) It is an advertisement to inform the public about the present activities of
the company and its future prospectus.
iii) It is an authentic record of the terms and conditions on which the shares
and debentures are offered or deposits are taken.
iv) Protects the interest of the persons who subscribe to shares/debentures
,since any misstatements in the prospectus attracts both civil and criminal
liability.
When prospectus is not required to be issued
A prospectus need to be issued in the following cases
i) Where shares and debentures are not offered to the public
ii) Where a person is invited to enter into an underwriting agreement.
iii) Where the shares /debentures are offered to the existing
shareholders/debenture holders.
iv) When the shares/debentures to be issued are uniform in respect of all
matters to those shares already issued and the shares are quoted on a
stock exchange.
v) When the issue is by a private company.

Form of Prospectus &Matters to stated in the prospectus
Every prospectus must state the matters specified in Part I of Schedule II and set
out the reports specified in Part II of Schedule II.
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Also SEBI guidelines for disclosure and investor protection must be adhered to.

Please Refer Schedule II
Read Prospectus of Eco Ventures
Requirements as to Prospectus
i) Prospectus must be dated-That date is taken as the date of issue of the
prospectus-(Sec 55)
ii) Signature of Prospectus- A copy of prospectus to be delivered to ROC for
registration duly signed by every director or proposed directors or their
duly authorized agents.
iii) Matters to be stated on the prospectus on the face of it
a) That a copy thereof has been delivered for registration and
b) The documents required to be endorsed on or attached to the copy
delivered for registration.
iv) Time limit within which prospectus is to be issued. -Sec 60(4))
The prospectus must be issued with in 90 days of which it was delivered
to the Registrar for registration.
v) Endorsement or attachment-A copy of the prospectus must be attached
with
a. The written consent of the expert to the issue of the prospectus , if
his consent has been included therein.
b. A copy of every contract appointing or fixing the remuneration of
managerial personnel.
c. A copy of every material contract entered into with in two years
before the date of issue of the prospectus.
d. When the persons making the reports relating to profit and losses ,
assets and liabilities etc. have made adjustments to them , a signed
statement by them stating the adjustments and the reasons thereof.
e. The written consent of the person if any named in the prospectus as
the auditor, adviser, attorney, solicitor , banker of the company to act
in that capacity.
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f. A duly signed report required by Part II OF Schedule II relating to
adjustments regarding the figures of any profits/losses or assets and
liabilities.
Penalty for issue of prospectus without Registration
The company and every person who knowingly issue a prospectus without
registration will punishable with fine up to Rs 50,000.
Approval of Prospectus
A draft prospectus need to be approved by the following agencies before the same
is filed with ROC for Registration.
a) All lead managers to the issue
b) Each of the Stock Exchanges where the shares of the Company are listed
and where the shares /debentures are proposed to be listed.
c) The lead financial institution underwriting the issue if any.


Vetting SEBI
The draft prospectus need to be vetted by SEBI. But vetting by SEBI does not take
responsibility for the correctness of the statements made in the prospectus.

Duty of ROC
Roc must ensure that the merchant bankers associated in various capacities are
registered with SEBI.
Shelf Prospectus
Shelf prospectus is a prospectus issued by any financial institution or bank for one
or more issues of the securities or class of securities specified in that prospectus.

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Red-Herring Prospectus
means a prospectus which does not have complete particulars on the price of the
securities offered and the quantum of securities offered.

Deemed prospectus/Prospectus by Implication/Offer for Sale Section 64
When the shares are allotted by the company to an issue house and such issue
house issues any document for the sale of such shares to the public , then such a
document will be deemed to be a prospectus and shall fulfill all the requirements of
a prospectus.
Application form to be accompanied by abridged prospectus Section 56(3)
Abridged prospectus means a memorandum containing such salient features of a
prospectus as may be prescribed by the Central Govt.
Form of Abridged prospectus
Form 2A is prescribed by the Central Govt.
Abridged prospectus to be attached to application form
When abridged prospectus is not required
In the following cases an abridged prospectus need not be attached with the
application.
a) When a person is invited bon fide to enter into an underwriting agreement
b) In relation to shares and debentures which are offered to the public.
c) To existing members or debenture holders of the company whether with or
without the right of renunciation.
d) In relation to shares and debentures which are-
i) Uniform in all respects with shares and shares or debentures
previously issued and
ii) Dealt in or quoted at a recognized stock exchanges
A copy of prospectus must be furnished to any one requesting for the same before
closing the subscription list.(56(3)
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Any person contravening the above section is punishable with fine up to Rs
50,000.
Experts Consent (Sections 56-59)
Meaning of Expert-59(2)
Expert includes an engineer , a valuer, an accountant and any other person whose
profession gives authority to a statement made by him.
Expert to be unconnected (Section 57)-not to be connected with the formation or
management of the company
Must be an independent person
Conditions
The statement of the expert must be included in the prospectus only if,
a) The expert has given his written consent to the issue of the prospectus
b) The expert has not withdrawn his consent before the delivery of the
prospectus for registration.
c) A statement that he has give the consent and has not withdrawn the same
appears in the prospectus.
Any person who contravenes the above provisions may be punished with
fine up to Rs 50,000.

The terms of the prospectus shall not be varied except with the consent of
the members in general meeting.

Expert can get himself indemnified in case for any losses caused to him due
to issue of a prospectus in contravention of the above conditions.
In case a prospectus is applied without complying with the legal
requirements, the affected person can claim damages from the company and
the directors for any loss caused to him.



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Matters to be stated in the prospectus

1. General Information

a) Name and address of the registered office of the company
b) Details of LOI /Industrial Licence obtained and the declaration of the
Central Govt. about the non-responsibility for financial soundness or
correctness of statements
c) Discalimer clause of SEBI
d) Office of Board and ROC.
e) Name of stock exchanges where shares are listed or applied for listing.
f) Provisions of Section 68A(1) REGARDING FICTITIOUS
APPLICATION.
g) Minimum Subscription clause
h) Allotment Letters/Refund Orders
i) Dates-Opening, Closing and earliest closing of the issue
j) Credit Rating-Mandatory for debentures with maturity period of more
than 18 months.
k) Names and address of lead managers, trustees(if applicable), legal
advisors, auditors ,bankers to the issue, brokers to the issue and secretary
to the company.
l) Underwriting details
m) Compliance Office
i) The name, address, telephone number, fax number and e,mail
address of the Compliance Officer
ii) Investors attention to contact the Compliance Officer relating to
public issue matters.
2. Capital Structure of the Company and Issue Details
a. Authorised, issued , subscribed and paid up capital of the Company.
b. Size of the Issue and Break up and details of lock-in period in respect of
shares and debentures issued to promoters.
c. Impact of Issue on paid up capital
d. Impact of issue on Securities Premium Account
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3. Terms of the present issue
a) Terms of Payment
b) Rights of the instrument holders
c) How to apply-availability of forms , prospectus and mode of payment
d) Utilization of Issue proceeds
e) Any special tax benefits for the company and its shareholders
4. Particulars of the Issue
a) Objects
b) Project Cost
c) Means of Financing
d) Appraisal
e) Deployment of Funds for the project.
5. Details about the History of the Company Management and Project.
a. History ,main objects and present business of the company
b. Subsidiaries of the Company
c. Promoters and their background
d. Key Managerial Personnel
e. Names, addresses and occupation of manager, managing director ,and
other directors including nominee directors ,whole-time directors and
directorships in other companies.
f. Cost of the Project, means of financing and location of the project.
g. Plant and machinery for the project ,technology adopted and the process
of manufacture.
h. Collaboration, performance guarantee or assistance in marketing by the
collaborators.
i. Infrastructure facilities for raw materials and utilities like water
,electricity etc.
j. Schedule of Implementation of the project with separate details of land
acquisition ,civil work, installation of plant and machinery and the
progress till the date of the prospectus.
k. Expected date of trial production and commercial production
l. Nature of the Products ,consumer/industrial and end users and approach
to marketing and proposed marketing set up.
m. Export possibilities and Export Obligation.
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n. Projections about capacity-Expected capacity utilization in the first 3
years and projections thereafter.
o. Projections about profitability-
p. Stock Market prices-High/low prices of the shares and debentures of the
company for each of the last 3 years and monthly high/low prices for the
last 6 months in the case of existing listed companies.
6. Management discussion and analysis of the financial conditions and result of
the operations as reflected in the financial statements.
7. Financial Information of Group Companies.
8. Information about Companies Under the Same Management Covered u/s
370(1) (B)
a) Name of the Company
b) Year of Issue
c) Type of Issue(
d) Amount Issue
e) Date of Closure of Issue
f) Date of Completion of Delivery of Shares/debenture certificates/letters
of allotment and
g) Date of Completion of the project , where the object of the issue was for
financing a project.
h) Rate of Dividend paid
9. Promise vis-s-vis Performance
10. Following information to be disclosed irrespective of the issue price.
a. EPS pre-issue for three years (all adjusted for changes in capital)
b. P/E pre-issue and comparison thereof with industry P/E where available(
disclosing the source)
c. Average Rate of Return on net worth in the last three years.
d. Minimum return on increased net worth required to maintain pre-issue
EPS .
e. Net Asset Value per share as on last balance sheet date.
f. Net Asset Value per share after issue and comparison thereof with the
issue price.
g. An illustrative format of disclosure in respect of basis for issue price is
given in Schedule XV
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11.Outstanding Litigation Pertaining to
a) Matters likely to affect operation and finances of the company ,
including disputed tax liabilities and
b) Criminal Prosecution launched against the company and directors for
alleged offences under the following statutes

- The Indian Stamp Act, 1899
- The Central Excise Act, 1944
- The Imports and Export(Control Act) 1951
- The Central Excise Act, 1944
- The Imports and Export (Control) Act 1951
- The Industries( Development and Regulation) Act,1951
- The Prevention of Food Adulteration Act, 1954
- The Essential Commodities Act, 1955
- The Companies Act, 1956
- The Wealth Tax Act, 1957
- The Income-Tax Act , 1961
- The Customs Act, 1962
- The MRTP Act , 1969
- The FEMA Act, 1999
12.Risk Factors and Management perception as the same , if any
13.Disclosure on Investor Grivences and Redressal System
14.General Information
Matters and Reports Contained in Part II of Schedule II
a) Consent of Directors, audito,rs, solicitors /advocates ,managers to the issue,
Registrars to the issue ,bankers to the company, bankers to the issue and
experts
b) Experts opinion obtained, if any
c) Change ,if any , in directors and auditors during the last three yearsand
reasons thereof
d) Authority for the issue and details of resolution passed for the issue.
e) Procedure and time schedule for allotment and issue of share certificates
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f) Names and addresses of the company secretary, legal adviser ,lead
managers.co-managers, auditors ,bankers to the company, bankers to the
issue and brokers to the issue.
15.Financial Information
A report from the auditors on
a) Profit and Losses of the company and if the company has
subsidiary/ies , then the combined profit and losses or the profit
and losses of subsidiaries separately, for each of the five
financial years preceding the issue of the prospectus
b) Assets and Liabilties of the company at the last date at which
accounts are made up and the combined assets if the company
has got subsidiaries
c) Rates of dividend paid by the Company in respect of each class
of shares for each of the 5 years immediately preceding the date
of prospectus.
16 Statutory and other information
a. Minimum subscription , as laid down in the SEBI guidelines
b. Expenses to the issue giving separately the fees payable to advisers
registrars to the issue ,managers to the issue and trustees for debenture
holders.
c. Underwriting commission and brokerage
d. Previous issue for cash or consideration otherwise than for cash
e. Details of public or right issue during the last 5 years
i) Date allotment and refund
ii) Date of listing on the stock exchange and
iii) Amount of premium or discount , if applicable

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f. Details of premium received in respect of any issue of shares made in the
two years preceding the date of issue of prospectus or to be made stating the
proposed date of the issue , the reasons for differentiation of premium fopr
different categories , if applicable and the disposal of premium received or to
be received
g. Commission or brokerage
h. Debenture and redeemable preference shares and other instruments
outstanding on the date of prospectus and the terms of their issue.
I Option to subscribe. The details of options to subscribe for securities to be
dealt with in a depository.
j. Particulars of property purchased or proposed to be purchased from vendors
to be paid for wholly or partly out of the proposed issue and the interest of
the promoters or directors in any transaction relating to the property within
the last 2 years.
k. Details of Directors , proposed directors, whol;e-time director , their
remuneration, appointment and remuneration of the managing directors.
l. Interest of directors,their borrowing powers and qualification or shares.
m. Any amount or benefit paid or given within the 2 preceding years or
intended to be paid or given to any promoter or officers and consideration
for the payment or giving of the benefit.
n. The dates of, parties to and general nature of
i. Every contract of appointment or remuneration of a managing director
or manager and

ii) every other material contract , not being a contract entered into in the
ordinary course of business of the company or entered into more than
2 years prior to the date of prospectus

Reasonable time and place for inspection of the contract should be
provided for
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o. Full particulars of the nature and extent of interest of every director or
promoter

- In the promotion of the company or
- In any property acquired by the company within 2 years of the date of
the prospectus or proposed to be acquired by it.
P) Rights of Members regarding voting ,dividen d ,lien on shares
,modification of rights and forfeiture of shares and debentures.
q)Restriction on transfer and transmission of shares/debentures and on
consolidation splitting.
r)Revaluation of assets , if any, during the last three years
s)Material contracts and Inspection of Documents
t) Particulars of default in meeting statutory dues, institutional dues
,dues to holders of instruments like debentures ,fixed deposits, and
arrears of cumulative preference shares, pertaining to the company
and /or others companies promoted by the same promoters , which are
listed on the stock exchange.
u)Any material development after the date of the last balance sheet
and its impact on the performance and prospects of the company.















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MISLEADING PROSPECTUS
A prospectus can be said to be misleading if it contains untrue statement. An
untrue statement is contained in prospectus if
a) It contains a statement which is misleading in the form and context in which
it is included
b) It omits any matter which is calculated to mislead.
Thus untrue statement includes not only false statements but also concealment of
material facts.
Rule of Golden Legacy
Justice Kindersley in New Brunswick and Canada Rly and Land Co.vMuggeridge
observed
Those who issue a prospectus hold out to the public that great advantage will
accrue to persons who will take shares. Public are invited to take shares on the
faith of the representation contained in the prospectus. Therefore they are bound to
state everything honestly and faithfully. They must not only abstain from stating
something as a fact when it is actually so but also must not omit a fact the
existence of which might in any degree affect the nature or quality of the privilege
and advantages which the prospectus holds out as an inducement to take shares

There must be neither false statement nor concealment of any material fact in the
prospectus.
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Remedies in case of misleading prospectus
Against the Company
Right to Rescind the Contract
Right to claim Damages for fraud u/s 19 of the Indian Contract Act , 1872

Right against the Directors
Right to Claim Damages for Misrepresentation u/s 62 of the Companies Act, 1956
Right to Claim Damages for Omission u/s 56
Right to Claim Damages for Fraud u/s 19 of the Indian Contract Act 1872












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Remedies against the Company
Right to Rescind the Contract to take shares
A person who has been induced to take shares in a company on the basis of a
misleading prospectus can rescind the contract, but subject to certain conditions
a) The prospectus must have been issued by the company or someone
authorized by the company
b) There must be misrepresentation or omission of facts
c) The misrepresentation must be of fact and not of law.
d) The misrepresentation or fact must be misleading.
e) The misrepresentation must be material to the contract of taking shares
f) The aggrieved party must have relied on such prospectus for buying shares.
g) The rescind of the contract must be done in reasonable time and before the
company goes into liquidation.
When the right to recession is lost
The right to rescind the contract must be exercised before the aggrieved party
affirms the contract
Affirmation takes place when
- He received dividends or paid calls
- Where he attends meetings and vote
- Where he executes a transfer of his shares
Lapse of Reasonable time
Commencement of Liquidation of the Company




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Right to Claim Damages for Fraud
The subscriber can recover damages for any loss sustained by him for having
purchased the shares on the basis of any fraudulent misrepresentation of material
facts.
Fraud is done where a false statement has been made
-knowingly
-without belief in its truth
-recklessly ,carelessly whether it is true or false.

Conditions to claim Damages
- There must be a fraudulent misrepresentation
- The fraudulent representation must relate to facts which are material
to the contract to purchase shares
- The aggrieved must have actually relied on such a statement
- The aggrieved party must have taken the shares directly from the
company.
- He must have suffered some loss.

Remedies against the Directors and Promoters
Right to Claim Damages for Misrepresentation u/s 62(1)
A subscriber who has suffered losses due to any untrue statement contained in a
prospectus may claim damages .
Persons liable to compensate
- Every director of the company at the time of the issue of the
prospectus
- Every person who has authorized himself to be named as a director
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- Every promoter of the Company
- Every person who has authorized issue of the prospectus
Action must be taken within 3 years from the date of allotment of shares.
Defences available to Directors etc (Sec 62(2)
No person can be held liable under this section if he proves that
a) Having consented to act as a director , he has withdrawn his consent before
the issue of the prospectus or the prospectus was issued without his
authority.
b) That the prospectus was issued without his consent and on coming to know
of its issue he has give reasonable public notice
c) After the issue of the prospectus but before allotment on coming to know of
the untrue statement he has withdrawn his consent and gave reasonable
public notice of the same.
d) That he had reasonable ground to believe till allotment that the statement
was true.
e) That the statement was a correct and fair representation of the statement
made by an expert and the expert has give consent to the same and not
withdrawn his consent till the time the prospectus was delivered for
registration.
f) That the statement is a copy of or extract from an official document or is
made by an official person , it was a correct and fair copy of the document or
a fair representation of the statement.
Remedies available against the expert
Liable to compensate in respect of any statement made by him and included in the
prospectus and which turns out to be untrue .
An expert can defend himself by proving that
a) He withdrew his consent in writing before delivery of a copy of the
prospectus for registration with ROC
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b) On being aware of the untrue statement he has withdrawn his consent in
writing after registration but before allotment and give reasonable public
notice giving reasons for withdrawing his consent.
c) He was competent to make the statement and he believed it be true.
Measure of Damages
The difference between the value of the shares if the statement had turned true and
the true value of the shares at the time of allotment.
The directors who are held liable to pay damages can get himself indemnified .
from other directors

Right to Claim Damages u/s 56
A subscribe has right to claim damages for omission if he proves that
a) There is omission of any fact required to be disclosed u/s 56 read with
schedule II
b) That he would not have purchased shares if there had been no such
omissions and
c) That he has actually suffered a loss.
-Omission does not entitle the subscriber to rescind the contract
-subscriber can sue even if the omission does not make the prospectus misleading.
Defenses available to directors etc u/s 56(4)
a) He proves that he had no knowledge of any matter not disclosed
b) He proves that the non-compliance or contravention arose from an honest
mistake of fact or
c) In the opinion of the court , the matter not disclosed was immaterial
d) That the non-compliance or contravention ought to be excused with regard
to all the circumstances of the case.

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Criminal Liability for Misstatement (Section 63)
Every person who authorized the issue of prospectus containing an untrue
statement shall be punishable with imprisonment for a term up to 2 years or with
fine up to Rs 5,000 or with both.
He may defend himself by showing that
a) That the statement was immaterial
b) That he had reasonable ground to believe and did upto the time of issue of
the prospectus that the statement was true.


Section 68 Penalty for fraudulently inducing persons to invest money.

Any person who either by knowingly or recklessly making any
statement, promise or forecast which is false, deceptive or
misleading or by any dishonest concealment of material facts,
induces or attempts to induce another person to enter into, or to
offer to enter into

a) any agreement for or with a view to acquiring, disposing of,
subscribing for, or underwriting shares or debentures; or

b) any agreement the purpose or pretended purpose of which is to
secure a profit to any of the parties from the yield of shares or
debentures, or by reference to fluctuations in the value of shares or
debentures,

shall be punishable with imprisonment for a term which may extend
to five years, or with fine which may extend to
1
[one lakh rupees], or
with both.





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Personation for acquisition, etc., of shares.

68A. Personation for acquisition, etc., of shares.

(1) Any person who

(a) makes in a fictitious name an application to a company for acquiring, or
subscribing for, any shares therein, or

(b) otherwise induces a company to allot, or register any transfer of, shares
therein to him, or any other person in a fictitious name,

shall be punishable with imprisonment for a term which may extend to five
years.

(2) The provisions of sub-section (1) shall be prominently reproduced in
every prospectus issued by the company and in every form of application
for shares which is issued by the company to any person.


Statement in lieu of prospectus-Sec 70

When public company having share capital raises capital not publicly it will
have to file a statement in lieu of prospectus with the Registrar.

The statement in lieu of prospectus must set out the matters as in Schedule
III of the Act.

Filed at least 3 days before the date of allotment of shares /debentures.




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69. Prohibition of allotment unless minimum subscription received.

(1) No allotment shall be made of any share capital of a company offered to
the public for subscription, unless the amount stated in the prospectus as
the minimum amount which, in the opinion of the Board of directors, must
be raised by the issue of share capital in order to provide for the matters
specified in clause 5 of Schedule II has been subscribed, and the sum
payable on application for the amount so stated has been paid to and
received by the company, whether in case or by a cheque or other
instrument which has been paid.

(2) The amount so stated in the prospectus shall be reckoned exclusively of
any amount payable otherwise than in money, and is in this Act referred to
as the minimum subscription.

(3) The amount payable on application on each share shall not be less than
five per cent of the nominal amount of the share.

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[(4) All moneys received from applicants for shares shall be deposited and
kept deposited in a Scheduled Bank

(a) until the certificate to commence business is obtained under section
149, or

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(b) where such certificate has already been obtained, until the entire
amount payable on applications for shares in respect of the minimum
subscription has been received by the company,

and where such amount has not been received by the company within the
time or the expiry of which the moneys received from the applicants for
shares are required to be repaid without interest under sub-section (5), all
moneys received from applicants for shares shall be returned in
accordance with the provisions of that sub-section.

In the event of any contravention of the provisions of this sub-section, every
promoter, director or other person who is knowingly responsible for such
contravention shall be punishable with fine which may extend to 2[fifty
thousand rupees].]

(5) If the conditions aforesaid have not been complied with on the expiry of
one hundred and twenty days after the first issue of the prospectus, all
moneys received from applicants for shares shall be forthwith repaid to
them without interest; and if any such money is not so repaid within one
hundred and thirty days after the issue of the prospectus, the directors of
the company shall be jointly and severally liable to repay that money with
interest at the rate of six per cent. per annum from the expiry of the one
hundred and thirtieth day:

Provided that a director shall not be so liable if he proves that the default in
the repayment of the money was not due to any misconduct or negligence
on his part.

(6) Any condition purporting to require or bind any applicant for shares to
waive compliance with any requirement of this section shall be void.

(7) This section, except sub-section (3) thereof, shall not apply in relation to
any allotment of shares subsequent to the first allotment of shares offered
to the public for subscription.