Chapter III of Companies Act – Prospectus & Allotment of Securities

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 Section 28 --> Offer for Sale

Stock Exchange

Promoters of the company

Investors(Public)

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 Section 28 --> Offer for Sale of Shares by Certain Members of Company

The members, (whether individuals or bodies

corporate or both), to take all actions in respect of offer of sale for
and on their behalf and they shall reimburse the
whose shares are proposed to be offered to the company all expenses incurred by it on this
public, matter

shall collectively authorise the company, whose

shares are offered for sale to the public,

Any document by which the offer of sale to the

public is made shall, for all purposes, be deemed
to be a prospectus issued by the company.

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 Section 29 --> Public Offer of Securities to be in Dematerialised form

• Every company making public offer shall issue the securities only in dematerialised form.
• Promoters of public company making public (The promoters must firstly convert their convertible
offer of convertible securities securities held in physical form into demat form)

Every unlisted public company shall a) Issue the securities only in dematerialised form; and
b) Facilitate dematerialisation of all its existing securities

Every unlisted public company

 Issuing securities a) before making such offer, ensue that entire holding of
 Buyback of securities securities of its promoters, directors, key managerial
 Right issue personnel has been dematerialised
 Bonus issue

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 Section 29 --> Public Offer of Securities to be in Dematerialised form

a) who intends to transfer such securities shall get such

securities dematerialised before the transfer OR
Every holder of securities of an unlisted
public company
b) who subscribes to any securities of an unlisted public
company all ensure that all his existing securities are
held in dematerialized form before such subscription.

a) maintains security deposit at all times, of not less than

two years', fees with the depository and registrar to an
Every unlisted public company shall issue and share transfer agent

b) Offer securities or do a buyback of securities or

bonus/ right issue till the above payments are made.

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 Section 29 --> Public Offer of Securities to be in Dematerialised form

Form PAS - 6
 PAS – 6 is the reconciliation of share capital audit report.

 Every unlisted public company shall submit Form PAS-6 to the Registrar within sixty days from the conclusion of
each half year duly certified by a company secretary in practice or chartered accountant in practice.

 The company shall immediately bring to the notice of the depositories any difference observed in its issued capital
and the capital held in dematerialised form

 The grievances of security holders of unlisted public companies under this rule shall be filed before the Investor
Education and protection Fund Authority.

This rule shall not apply to an unlisted public company which is:-
 (a) a Nidhi
 (b) a Government company or
 (c) a wholly owned subsidiary.

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 Section 30 --> Advertisement of Prospectus

as regards
• the objects,
Where an advertisement of any • the liability of members and
prospectus of a company is published in • the amount of share capital of the company, and
any manner, it shall be necessary to • the names of the signatories to the memorandum
specify therein the contents of its and
memorandum • the number of shares subscribed for by them, and
• its capital structure.

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 Concept Questions

The grievances related to dematerialisation of securities by unlisted public company shall be submitted to
______________.

a) ROC
b) Tribunal
c) SEBI
d) Investor Education & Protection Fund Authority

Answer :- D

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 Concept Questions

Reconciliation of share audit report is made in Form ______________. PAS - 6

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Happy Learning!