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Tuesday, 15 November 2016

Prospectus Summary Notes for CA IPCC Law May 2017




Prospectus Summary Notes for CA IPCC Law May 2017




Prospectus Introduction:

Companies Act, 2013 defines prospectus as any document described as issued as the prospectus and includes red herring prospectus or shelf prospectus or any notice, circular, advertisement or other document inviting offers from the public for subscription or purchase of any securities.

Issue of Shares/Securities by Public Company:

A public company may issue securities in the following manner:
a) to public through prospectus (herein referred to as “public offer”), or
b) through private placement; or
c) through a rights issue or a bonus issue

Offer or Invitation to public:

Offer or invitation to public includes the invitation to any section of public, members or debenture holders of the company, clients of the person issuing the prospectus or in any other manner.
[Where the invitation is issued to domestic concern (means, close relatives, and friends not exceeding 50), it is not treated as a public offer].

Time limit for issue of Prospectus:

The prospectus shall be issued within 90 days from the date of registration with ROC.

Effective date:

The date of issue of the prospectus is the date on which it first appears as an advertisement on a newspaper.

Abridged Prospectus:

‘Abridged Prospectus’ contains the salient features of a prospectus. No application forms for shares shall be issued without attaching the Abridged Prospectus.

Shelf Prospectus and Information Memorandum:

“Shelf prospectus” means a prospectus in respect of which the securities or class of securities included therein are issued for subscription in one or more issues over a certain period without the issue of a further prospectus.
The Shelf Prospectus shall indicate a period not exceeding one year as the period of validity of such prospectus.
Before the issue of second or subsequent offer of securities under the shelf prospectus, the company shall be required to file an Information Memorandum with the Registrar

Red Herring Prospectus:

The expression “Red Herring prospectus” means a prospectus which does not include complete particulars of the quantum or price of the securities included therein.
The company proposing to make an offer of securities may issue a red herring prospectus before the issue of a prospectus.
A company proposing to issue a red herring prospectus shall file it with the Registrar at least three days before the opening of the subscription list and the offer.