On 1st February 2016, Ministry of Corporate Affairs uploaded the report of Companies Law Committee on its website here. In 3rd post on this report, we will discuss recommendations of the committee related to Incorporation and allotment of capital securities.
Tag Archives: Private Placement
Section 42 of the Companies Act, 2013 allows any company, whether private or public, to make private placement of securities through issue of a “Private Placement Offer Letter” (PPOL). We have discussed provision of the Section earlier here.
In addition of Section 42, Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules 2014 prescribes all fine prints of the private placement.
In recent posts, we discussed provisions of Chapter III of the Companies Act, 2013. This is time to discuss major penal provisions in this chapter.
CRIMINAL LIABILITY FOR MIS-STATEMENT IN PROSPECTUS (SECTION 34):
Where a prospectus, issued, circulated or distributed:
a) includes any statement which is untrue or misleading in form or context in which it is included; or
b) where any inclusion or omission of any matter is likely to mislead;
Every person who authorises the issue of such prospectus shall be liable under section 447 i.e. fraud.
In recent posts, we have discussed matters related to prospectus. In this post we will discuss, matters related to issue and allotment of securities following public offer.
SECURITIES IN DEMATERIALISED FORM (SECTION 29):
Under this section;
- Every company making public offer; and
- Such other class or classes of companies as may be prescribed
shall issue the securities only in the dematerialised form.
When any company issue its securities in dematerialised form, provisions of the Depositories Act, 1996 and regulations made under that Act shall be applicable.
There is no bar for any other company to issue its securities in any form. Any other company may convert its securities into dematerialised form.