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CA Intermediate · Corporate and Other Laws · Prospectus and Allotment of Securities

Kaveri Infra Ltd, an unlisted public company, issued a prospectus. The prospectus was issued on 10 July, and the company wants to know about its validity. Under the Companies Act, 2013, which statement is correct?

A prospectus stays valid for 90 days from the date on which its copy was delivered to the Registrar for registration, unless a shorter period is stated. It is not measured from first allotment, one year or the next annual general meeting.

  1. AA prospectus remains valid for 90 days from the date on which a copy was delivered to the Registrar for registrationCorrect
  2. BA prospectus remains valid for 90 days from the date of the first allotment
  3. CA prospectus remains valid for one year from its date of issue
  4. DA prospectus is valid until the company's next annual general meeting

Explanation

A prospectus is valid for 90 days beginning with the day on which a copy was delivered to the Registrar for registration, unless a shorter period is stated. The first allotment date, one year, or the AGM are not the Act's tests.

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