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

Sunrise Agro Foods Ltd, an unlisted public company, plans to invite the public to subscribe for its equity shares through a prospectus. Before the prospectus is issued to the public, which of the following steps must be completed under the Companies Act, 2013?

Before a prospectus is issued to the public, a signed copy must be delivered to the Registrar of Companies for registration along with the required consents and documents. The Registrar only registers it and does not approve its merits, and no Central Government approval or prior newspaper publication is required.

  1. AA copy of the prospectus must be delivered to the Registrar for registration, with the required consents and documents attachedCorrect
  2. BThe prospectus must be approved by the Central Government
  3. CThe prospectus must be approved by the Registrar's written opinion on its merits
  4. DThe prospectus must be published in a newspaper for 30 days before filing

Explanation

A prospectus cannot be issued by or on behalf of a company unless, on or before the date of publication, a copy signed by the required persons has been delivered to the Registrar for registration, along with the required consents and documents. The Registrar registers the document but does not approve its merits, so the option on the Registrar's opinion is wrong. The Central Government has no approval role, and there is no 30-day newspaper requirement.

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