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CSEET · Business Laws and Management · Elements of Company Law

A company proposing to make an offer of securities issues a red herring prospectus. As per the Companies Act, 2013, with whom and by when must it be filed?

A red herring prospectus must be filed with the Registrar at least three days before the subscription list and the offer open. Filing on the opening day, after closing, or only with SEBI does not meet the requirement of the Companies Act, 2013.

  1. AWith the Registrar, at least three days before the opening of the subscription list and the offerCorrect
  2. BWith the Registrar, on the day the subscription list opens
  3. CWith SEBI alone, at least seven days before the offer opens
  4. DWith the Registrar, within three days after the offer closes

Explanation

Section 32(2) requires a company issuing a red herring prospectus to file it with the Registrar at least three days before the subscription list and offer open. Filing after the offer or on the opening day does not satisfy this rule, and the filing is with the Registrar, not SEBI alone.

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