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OFFER OF SECURITIES FOR SALE [SECTION 25]
Where a company allots or agree to allot any securities of the company with a view to all or any of those securities being offered for sale to the public shall be treated as if the securities had been offered to the public for subscription and as if persons accepting the offer were subscribers for those securities.
Any document by which this offer for sale to the public is made shall be deemed to be a prospectus issued by the company. All enactments and rules related to prospectus and liability in respect of any mis–statements etc are applicable to such document.
If it is shown that –
i. An offer of the securities for sale to the public was made within six months after the allotment or agreement to allot; or
ii. At the date when the offer was made, the whole consideration had not been received by company for such securities;
It will be presumed that such allotment or agreement to allot securities was made with an intention to the securities will be offered for sale to the public.
Requirement in Deemed Prospectus Section 25(3):
Section 26 as applied by Section 25 shall have effect as if —
- a. it required a prospectus to state in addition to the matters required by section 26 to be stated in a prospectus—
i. 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
ii. the time and place at which the contract where under the said securities have been or are to be allotted may be inspected;
the persons making the offer were persons named in a prospectus as directors of a company.
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