Commencement Notification CA2013 :: Notified Sections 23,24,25

Commencement Notification Of Companies Act 2013 :: 98 Sections Notified

Chapter III -Prospectus and Allotment of Securities (Sections 23 – 42)

Section 23- Public offer and private placement except clause (b) of sub-section (1) and sub-section (2)

(1) A public company may issue securities”

(a) to public through prospectus (herein referred to as “public offer”) by complying with provisions of Part I of this Chapter; or

[Not Notified] (b) through private placement by complying with the provisions of Part II of this Chapter: or

(c) through a rights issue or a bonus issue in accordance with the provisions of this Act and in case of a listed company or a company which intends to get its securities listed also with the provisions of the Securities and Exchange Board of India Act,1992 and the rules and regulations made there under.

(2) A private company may be issue securities-

(a) by way of rights issue of bonus issue in accordance with be provisions of this Act; or

[Not Notified] (b) through private placement by complying with the provisions of Part II of this Chapter.

Explanation: For the purposes of this Chapter. Public offer includes initial public offer or further public offer or securities to the public by a company. or an offer for sale of securities to the public by an existing shareholder through issue of a prospectus.

Section 24- Power of Securities and Exchange Board to regulate issue and transfer of securities, etc.

(1) The provisions contained in this Chapter and Chapter IV and in section 127 shall,-

(a) in so far as they relate to ”

(i) issue and transfer of securities, and

(ii) non-payment of dividend, by listed companies or those companies which intend to get their securities listed on any recognised stock exchange in India, except as provided under this Act, be administered by the Securities and Exchange Board by making regulations in this behalf;

(b) in any other case, be administered by the Central Government.

Explanation.For the removal of doubts, it is hereby declared that all powers relating to all other matters relating to prospectus, return of allotment, redemption of preference shares and any other matter specifically provided in this Act shall be exercised by the Central Government, the Tribunal or the Registrar, as the case may be.

(2) The Securities and Exchange Board shall, in respect of matters specified in sub-section (1) and the matters delegated to it under proviso to sub-section (1) of section 458, exercise the powers conferred upon it under sub-sections (1), (2A), (3) and (4) of section 11, sections 11A,11B and 11D of the Securities and Exchange Board of India Act,1992.

Section 25- Document containing offer of securities for sale to be deemed prospectus except sub-section (3)   

(1)  Where a company allots or agrees to allot any securities of the company with a view to all or any of those securities being offered for sale to the public, any document by which the offer for sale to the public is made shall, for all purposes, be deemed to be a prospectus issued by the company; and all enactments  and rules of law as to the contents of prospectus and as to liability in respect of mis-statements in and omissions from prospectus, or otherwise relating to prospectus, shall apply with the modifications specified in sub-sections (3) and (4)  and shall  have effect accordingly, as if the securities had been offered to the public for subscription and as if persons accepting the offer in respect of any securities were subscribers for those securities, but without prejudice to the liability, if any, of the persons by whom the offer is made in respect of mis-statements contained in the document or otherwise in respect thereof.

(2)  For the purposes of this Act, it shall, unless the contrary is proved, be evidence that an allotment of, or an agreement to allot, securities was made with a view to the securities being offered for sale to the public if it is shown”

(a) that an offer of the securities or of any of them for sale to the public was made within six months after the allotment or agreement to allot; or

(b) that at the date when the offer was made, the whole consideration to be received by the company in respect of the securities had not been received by it.

[Not Notified] (3) Section 26 as applied by this section shall have effect as if ”

(i) it required, a prospectus to state in addition to the matters required by that section to be stated in a prospectus”

(a) the net amount of the consideration received or to be received by the company in respect of the securities to which the offer relates; and

(b) the  time and place at which the contract where under  the said securities have been or are to be allotted may be inspected;

(ii) the persons making the offer were persons named in a prospectus as directors of a company.

(4)  Where a person making an offer to which this section relates is a company or a firm, it shall be sufficient if the document referred to in sub-section (1) is signed on behalf of the company or firm by two directors of the company or by not less than one-half of the partners in the firm, as the case may be.


Tags: Bonus shareCentral GovernmentCompanies ActIndiaPrivate placementPublic companySecurities & Exchange Board of IndiaSecurity (finance)

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