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CS Professional · Strategic Management and Corporate Finance · Foreign Funding - Instruments, Laws and Procedures

Which provision applies to the issue of Indian Depository Receipts by a foreign company under the Companies Act, 2013?

Under section 391(1)(ii), sections 34 to 36 apply to the issue of Indian Depository Receipts by a foreign company, in the same way they apply to a prospectus issued by an Indian company, so the prospectus liability provisions are not avoided.

  1. ASections 34 to 36 apply to the issue of Indian Depository Receipts by a foreign companyCorrect
  2. BSection 31 on shelf prospectus alone applies
  3. CSection 28 on offer for sale alone applies
  4. DNo prospectus-liability provisions apply to such receipts

Explanation

Section 391(1)(ii) states that sections 34 to 36 (both inclusive) apply to the issue of Indian Depository Receipts by a foreign company, as they also apply to a prospectus issued by a company incorporated outside India under section 389. The other options are not what section 391 provides.

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