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CA Foundation · Business Laws · The Companies Act, 2013

Sunrise Agro Ltd, a public company, plans to invite the public to subscribe to its shares. Under the Companies Act, 2013, what must the company do before issuing the prospectus to the public?

The company must deliver a signed copy of the prospectus to the Registrar of Companies for registration on or before the date it is published. No Central Government approval is needed, and filing cannot wait until after allotment, because disclosure to investors must come first.

  1. AFile a copy of the prospectus, signed by the required persons, with the Registrar of Companies for registration on or before the date of publicationCorrect
  2. BObtain the prior written approval of the Central Government for the prospectus
  3. CGet the prospectus approved by a special resolution of its debenture holders
  4. DFile the prospectus with the Registrar only after the allotment of shares is complete

Explanation

A prospectus cannot be issued by or on behalf of a company unless, on or before the date of its publication, a copy signed by every person named as a director or proposed director has been delivered to the Registrar for registration. Central Government approval is not required. Filing after allotment would defeat the purpose of the pre-issue disclosure.

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