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Questions and Answers
In the context of companies intending to get listed, who administers matters relating to non-payment of dividend?
Who must sign the deemed prospectus in the case of a firm?
Deemed prospectus is issued by whom?
What is NOT a way through which a private company can make an issue of securities?
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How long must the securities be offered or issued to the public within, once the agreement is made between the main company and issuing house?
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Who are deemed to be directors of the main company when a deemed prospectus is signed?
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Which type of company can issue securities through Private Placement?
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In which jurisdictions can public companies issue securities for listing purposes?
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Who administers matters related to non-payment of dividend for listed companies?
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Which regulatory body has the power to regulate the issue and transfer of securities for listed companies?
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Under what circumstances can the Central Government exempt public companies from certain provisions of the Companies Act?
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Which type of issue can a private company use to raise capital according to the text?
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What kind of document is considered a prospectus according to the text?
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In the context of deemed prospectus, what does the issuing company represent?
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What is a 'red herring prospectus' according to the text?
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Why are the prospectus provisions also made applicable to the main company in deemed prospectus situations?
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What happens if the whole consideration is not received by the main company before an offer is made to the public by the issuing house?
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What is a 'shelf prospectus' as mentioned in the text?
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Study Notes
Key Concepts in Company Securities
- A private company cannot make an issue of securities through a public offer.
Directors and Partners in Issuing House
- Directors or partners of the issuing house are deemed to be directors of the main company.
Deemed Prospectus
- A document containing an offer of securities for sale is deemed a prospectus if it is issued by an issuing house company or firm.
- A deemed prospectus is signed by directors or partners of the issuing house.
- Securities must be offered or issued to the public within 6 months of the agreement between the main company and the issuing house.
Public Offer
- A public company may issue securities through a public offer, right issue, and bonus issue.
- A private company may issue securities through private placement.
Regulation of Securities
- Matters relating to non-payment of dividend in companies intending to get listed are administered by SEBI.
- The Central Government may exempt certain classes of public companies from provisions of Chapter III, Chapter IV, Section 89, Section 90, or Section 127.
- Listed companies and companies intending to get listed are regulated by SEBI regarding issue and transfer of securities.
- Other companies are regulated by the Central Government, Registrar, or Tribunal regarding issue and transfer of securities.
Prospectus
- A prospectus includes documents, notices, circulars, advertisements, or other documents inviting offers from the public for subscription or purchase of securities.
- Types of prospectus include deemed prospectus, red herring prospectus, and shelf prospectus.
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Description
Test your knowledge on Chapter III of the Companies Act, focusing on the topics of prospectus, allotment of securities, public offer, private placement, right issue, and bonus issue.
