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LISTING OF SHARES [SECTION 40]
Every company making public offer shall make an application to at least one stock exchange before making the public offer. This is duty of company to obtain permission of stock exchange or stock exchanges for the dealing of securities there.
Prospectus for the public offer shall also state the name or names of the stock exchange in which application for dealing of the securities has been made.
All money received on application from the public for subscription of the securities shall be kept in a separate bank account in a schedule bank. This money shall not be utilised for any purpose other than –
- For adjustment against allotment of securities where the permission from the stock exchanges named in prospectus has been received; or
- For repayment of money within the time specified by the Securities and Exchange Board, where the company is for any other reason unable to allot securities.
A company may pay commission to any person in connection with the subscription to its securities subject to such conditions as may be prescribed.
Any condition which require or bind any applicant for securities to waive compliance with any of the requirement of this section shall be void.
If a default is made in complying with the provisions of this section, the company shall be punishable with a fine which shall not be less than five lakh rupees but which may extend to fifty lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than fifty thousand rupees but which may extend to three lakh rupees, or with both.
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