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1) pvt Co wants to issue share….prospectus is mandatory ? Sec upto 41 shall be followed along with 42 ? 2) public / pvt Co offer share ….it was subscribed by 1 person or if offer is made to one person…..is prospectus needed for that ?
Answers (7)
Only in case of public offer, prospectus is needed. 1. Pvt Co. Does not need prospectus. Section 42 applies 2. If public offer done by public company, prospectus applicable 3. Underwriter already must have read the full prospectus with details as he is purchasing shares on temp basis. Hence abridged prosp (summary) Not needed.
CA YOGITA HARJANI Faculty
Only in case of public offer, prospectus is needed. 1. Pvt Co. Does not need prospectus. Section 42 applies 2. If public offer done by public company, prospectus applicable 3. Underwriter already must have read the full prospectus with details as he is purchasing shares on temp basis. Hence abridged prosp (summary) Not needed.
this said Even though it’s private circulation only….still it’s considered public offer and prospectus is mandatory
CA YOGITA HARJANI Faculty
Only in case of public offer, prospectus is needed. 1. Pvt Co. Does not need prospectus. Section 42 applies 2. If public offer done by public company, prospectus applicable 3. Underwriter already must have read the full prospectus with details as he is purchasing shares on temp basis. Hence abridged prosp (summary) Not needed.
It said if prospectus is issued to single person prospectus isn’t needed 2 or more person if issued then prospectus needed Nash vs Lynde
Thread Starter
Sushmita ChowdhuryIt said if prospectus is issued to single person prospectus isn’t needed 2 or more person if issued then prospectus needed Nash vs Lynde
These are case specific judgements. The facts of those specific cases required court to make deeper interpretation. However, Private company cannot offer shares to public at any cost and thus prospectus is not required. A public company must first ascertain whether it wants to offer shares to public or private individuals. Accordingly, prospectus provisions will come in picture.
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