TYPES OF Prospectus

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1. PROSPECTUS

2. Presented by: ROLL NO NAME TOPIC 67 ADESH WALAWALKAR CONTENT OF PROSPECTUS 68 VEDIKA ZORE INTRODUCTION OF PROSPECTUS TYPES OF PROSPECTUS 69 VIRAJ PATANKAR LEGAL REQUIREMENTS OF PROSPECTUS STATEMENT IN LIEU OF PROSPECTUS 70 RUDRA KHADYE PUBLIC DEPOSITS CASE STUDY 71 SWARAJ THAKUR PRIVATE PLACEMENT RULES AND REGULATIONS FOR PRIVATE PLACEMENT

3. INTRODUCTION The prospectus is a legal document, which offers the company’s financial securities for sale to the investors . It is a basic document on the basic of which investors decide whether or not to subscribe to the shares or debentures of the company. Prospectus must disclose all the important information related to the company.

4. DEFINATION Section.2 (70) defines Propectus: Any document described or issued as a prospectus includes: A Red herring prospectus referred to section 31 or shelf prospectus referred to section 32, or Any notice, circular, advertisement, or other document inviting offers from the public For the subscription or purchase of any securities of a body corporate.

5. TYPES OF PROSPECTUS ABRIGED PROSPECTUS : It means a memorandum containing salient features of prospectus as prescribed. A Copy of the prospectus shall, on a request being made by any person before the closing of the subscription list and the offer, be furnished to him.  If a company makes any default in complying with the above provisions, it shall be liable with a penalty of fifty thousand rupees for each default. DEEMED PROSPECTUS OR PROSPECTUS BY IMPLICATION: In this type of Prospectus offer of sale of shares or debentures are made through Issue houses. The company makes an agreement with the issue house, Its the issue house that advertises. Any document which offers the sale of securities to the public is deemed to be a prospectus by implication of law.

6. RED HERRING PROSPECTUS: It is a prospectus which does not contain all particulars on the price and quantam of securitues offered. This type of prospectus is issued to check the demand for securities. It is issued atleast three days prior to the opening of offer. SHELF PROSPECTUS AND INFORMATION MEMORANDUM: It is issued by any financial instituatio or bank for one or more issue of securities, in one specified prospectus. Shelf prospectus shall be valid for 1 year from the date of opening of the first offering of the prospectus. The company shall not required to file fresh prospectus with the registrar at every stage of offer of securities but has to submit information memorandum Information Memorandum contains all important information and the changes made if any.

7. WHEN PROSPECTUS IS NOT REQUIRED TO BE ISSUED In case of a Private Company prospectus is not required. When promoters or directors, intend raising fund from personal contacts and acquaintances without offering the shares and debentures to the public. When shares are offered to underwriters unders an underwriting agreement. When the company intends raising funds only from existing shareholders/ debenture holders. When the shares or debenture issued are uniform in all respects with shares or debentures previously issued and dealt in or quoted in a recognised stock exchange.

8. LEGAL REQUIREMENTS OF PROSPECTUS A document would be considered a prospectus only if it meet the following legal requirements, viz . It should be in written. It should be issued by or on the behalf of body corporate. It should be issued to public. It should contain invitation to public for making deposit or subscription of share or debentures of a body corporate.

9. It is a statement which is delivered by a company, having share capital to the Registrar for the registration,at least three days before the first allotment of shares or debentures under the following conditions: Where a company does not issue prospectus or , Where a company has issued a prospectus but has not proceeded to allot any of its shares offered to the public for subscription. SILOP is to be signed by every who is named therein as a director or proposed director of company. Where a company which is required to submit a SILOP does not comply with the requirement, it can not allot shares.(sec69(1)) STATEMENT IN LIEU OF PROSPECTUS

10. DIFFERENCE BETWEEN PROSPECTUS AND SILOP PROSPECTUS Filed by a public listed company. Has been defined in definations. Submitted to registrar, commission and share holders. Is a document containing an advertisement for invitation of subscription from the public. STATEMENT IN LIEU OF PROSPECTUS Filed by a pubic unlisted company. Has not been defined in definations. Submitted only registrar. Is not an invitation of subscription.

11. DIFFERENCE BETWEEN PROSPECTUS AND SILOP PROSPECT : Approval of commission must be obtained within 60 days before the issue of prospectus. No prescribed form is specified in this Ordinance. No prospectus shall be issued unless before the date of its publication, a copy signed by the directors or thier agent has been delivered to the registrar STATEMENT IN LIEU OF PROSPECTUS: Is not a kind of advertisement for invitation of subscription. Is filed on prescribed form. It is filed with the registrar concerned at 3 days before the allotment of shares.

12. CONTENT OF PROSPECTUS It shall be dated and signed and shall contain the following things : Every prospectus issued by or on behalf of a public company either with reference to its formation or subsequently, or by or on behalf of any person who is or has been engaged or interested in the formation of a public company,shall be dated and signed and shall . (A) State the following information, namely : ( 1 ) N ames and addresses of the registered office of the company, company secretary, Chief Financial Officer, auditors, legal advisers, bankers, trustees, if any, underwriters and such other persons as may be prescribed; (2 ) D ates of opening and closing of the issue. (3 ) A statement by the BOD of separate bank account. ( 4 ) D etails about underwriting of the issue.

13. CONTENT OF PROSPECTUS ( 5 ) C onsent of the directors, auditors, bankers to the issue, expert’s opinion, if any, and of such other persons, as may be prescribed (6 ) T he authority for the issue and the details of the resolution passed therefore ( 7 ) P rocedure and time schedule for allotment and issue of securities ( 8 ) C apital structure of the company in the prescribed manner ( 9 ) Ma in objects of public offer, terms of the present issue and such other particulars as may be prescribed ( 10 ) M ain objects and present business of the company and its location, schedule of implementation of the project.

14. CONTENT OF PROSPECTUS ( 11 ) particulars relating to : (A) management t perception of risk factors specific to the project . (B) gestation period of the project (C) extent of progress made in the project . (D) deadlines for completion of the project (E) any litigation or legal action pending or taken by a Government Department or a statutory body during the last five years immediately preceding the year of the issue of prospectus against the promoter of the company ( 12 ) minimum subscription, amount payable by way of premium, issue of shares otherwise than on cash (13 ) details of directors including their appointments and remuneration, and such particulars of the nature and extent of their interests in the company as may be prescribed ( 14 ) disclosures in such manner as may be prescribed about sources of promoter’s contribution.

15. CONTENT OF PROSPECTUS (B) REPORTS IN PROSPECTUS: Reports by the auditors of the company. 2. Reports relating to profits and losses of the company. 3. Reports about the business or transaction to which the proceeds of the securities are to be applied. (C) DECLARATION: Prospectus shall make a declaration about the compliance of the provisions of the act and nothing contained in the prospectus is contravening the provisions of act, Securities Contract regulation act 1956 and Securities and exchange Board of India Act 1992.

16. PRIVATE PLACEMENT (PP) UNDER COMPANIES ACT, 2013 INTRODUCTION : WE ALL KNOW   COMPANIES ACT,  2013  PROVIDES VARIOUS OPTIONS TO ISSUE SECURITIES (SHARES, DEBENTURES OR ANY OTHER TYPE OF SECURITIES). ONE OF THESE OPTIONS IS PRIVATE PLACEMENT. THE DEFINITION OF PRIVATE PLACEMENT EXPLAINS WHEN THE COMPANIES HAVE TO FOLLOW THE PROVISIONS. LET’S LOOK INTO THE DEFINITION AND THE PROVISIONS PRIVATE PLACEMENT

17. DEFINITION OF PRIVATE PLACEMENT PROCEDURE UNDER COMPANIES ACT, 2013: ​ ​ Explanation -I to Section 42(3) defines the Private Placement; “Private Placement” means any offer or invitation to subscribe or issue of securities to a select group of persons by a company (other than by way of public offer) through private placement offer-cum-application, which satisfies the conditions specified in this section. Let us split the definition and make it easy to understand Private Placement is: – any offer or invitation by a company – to subscribe or issue of securities – to a select group of persons, – other than by way of public offer,

18. LIST OF SECTIONS AND RULES APPLICABLE TO PRIVATE PLACEMENT: ​

19. Provisions: Now we understood what is the definition, but what are the provisions to be followed while issuing securities under Private placement (PP)? i . To whom securities can be issued under PP? ​ ​ The securities under PP can be issued /offered only to a select group of persons who have been identified by the Board . ​ ​ ii.  Private Placement offer can be given to how many persons? ​ ​ The offer of securities or invitation to subscribe securities, shall be made to not more than 50 persons in a single offer or not more than 200 persons in the aggregate in a financial year (excluding qualified institutional buyers and employees of the company being offered securities under ESOP). This restriction would be read for all the securities combined together in a Financial Year . ​

20. STEP BY STEP PROCEDURE FOR PRIVATE PLACEMENT ​ 1.   Hold Board Meeting​ 2.   Hold General Meeting​ 3.   File form MGT-14​ To approve the list of identified persons​ To approve the draft offer letter​ To call GM​ To pass special resolution approving PP and approving offer letter​ File the Special Resolution in Form MGT-14 within 30 days from the date of EGM​

21.  4. Circulate the Offer Letter (PAS-4)  PAS-4 to be circulated to the identified persons It can be circulated only after filing MGT-14  5.Receive the Application money The Application money to be received and kept in a Separate Bank to be done within 60 days from the date of receipt of Application Money   6.Allotment Allotment to be done within 60 days from the date of receipt of Application Money

22. 7.   File Return of Allotment The Return of Allotment in Form PAS-3 to be filed within 15 days from the date of allotment 8 .    Utilization of amount  The amount can be utilize only after filing PAS-3 9 .    Other incidental matters Issue of Share Certificates within 2 months from the date of allotment Updating the Register of Members

23. P ublic deposits : Public deposits – Public deposit means any deposit of money with the company and includes any money borrowed by the company. There are certain rules to be followed by the company in this regard. Failing to adhere may invoke fine up to twice the amount and imprisonment up to five years.

24. Deposit means any deposit of money with the company and includes any amount borrowed by a company but shall not include such categories or amount as maybe in consultation with the RBI. S.2(31) “includes any receipt of money by way of deposits on loan or in any other form by a company but does not include such categories of amount as may be prescribed in consultation with the RESERVE BANK OF INDIA.” S.73-76 of the Act 2013 deal with acceptance of deposit by companies. The company must also maintain ‘Deposit Repayment Reserve Account’. Stringent punishment in case of failure to repay deposit or interest.

25. Information regarding the acts: Act 2013 Definition of prospectus widened to include red herring prospectus and shelf-prospectus. Statement in lieu of prospectus done away with. Scope of deposit widened. More protection to investors. Deposits in case of private companies only from members. Act 1956 S.2(36) define prospectus does not include red herring and shelf prospectus. Statement in lieu of prospectus permitted. Less protection compared in Act 2013. Deposits in case of private companies can be from members, directors or relatives.

26. BIBLIOGRAPHY : VIPUL PRAKASHAN https://business-finance.blurtit.com/1432481/what-is-prospectus-and-its-contents https://tavaga.com/tavagapedia/prospectus/#:~:text=Deemed%20Prospectus%20%E2%80%93%20Deemed%20prospectus%20has,offer%20is%20made%20to%20investors . https://corporatefinanceinstitute.com/resources/data/public-filings/prospectus/

27. Thank you!