Where certain members of company propose to offer whole or part of their holding of share to public, they may do so in accordance with prescribed procedure. We have discussed provisions Section 28 of the Companies Act 2013 earlier here. Rule 8 of the Companies (Prospectus and Allotment of Securities) Rules 2014 prescribes procedure under Section 28 of the Companies Act, 2013.
The provisions of Part I of Chapter III namely “Prospectus and Allotment of Securities” and rules made there under shall be applicable to an offer of sale referred to in section 28. We have discussed these provisions here, here, here and here.
However following provisions shall not be applicable to offer to sale by a member, namely:-
(a) the provisions relating to minimum subscription;
(b) the provisions for minimum application value;
(c) the provisions requiring any statement to be made by the Board of directors in respect of the utilization of money; and
(d) any other provision or information which cannot be compiled or gathered by the offeror, with detailed justifications for not being able to comply with such provisions.
The prospectus issued under section 28 shall disclose the name of the person or persons or entity bearing the cost of making the offer of sale along with reasons.
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