CS Executive · Capital Market and Securities Laws · Issue and Listing of Non-Convertible Securities
Sunrise Infra Ltd, a public company, plans to raise money from the public by issuing non-convertible debentures through a prospectus. Under the Companies Act, 2013, how is such an offer described?
An issue of securities to the public through a prospectus is called a public offer under section 23 of the Companies Act, 2013. It differs from a rights issue, bonus issue or private placement, which are separate routes available to a company.
- AA rights issue
- BA public offerCorrect
- CA private placement
- DA bonus issue
Explanation
Section 23(1)(a) provides that a public company may issue securities to the public through a prospectus, and this is referred to as a public offer. Rights and bonus issues go to existing members, and private placement is governed by Part II of the Chapter.
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