TYPES OF PROSPECTUS

Types of Prospectus in Company Law Prospectuses can come in various forms, such as a full
prospectus, red herring prospectus, shelf prospectus, abridged prospectus, or deemed prospectus,
depending on the type of offering and regulatory requirements.
Each type of prospectus has its own specific features, usage, and regulatory provisions that
companies must adhere to while preparing and filing them.
Red Herring Prospectus (RHP) :The Red Herring Prospectus (RHP) is a preliminary prospectus
or offer document used by companies to make an initial public offering (IPO) or a follow-on public
offer (FPO) of securities.
The RHP contains all the relevant information about the company’s shares or debentures, except for
the final offer price.
It is filed with the ROC and circulated to potential investors for their consideration.
Shelf Prospectus : A Shelf Prospectus is a prospectus that is filed by a company for multiple issues
of securities within a period of one year from the date of its approval by the ROC.
It allows the company to make multiple public offers of its securities during the validity period of
the Shelf Prospectus without filing a fresh prospectus for each offer.
Section 31A: This section outlines the requirements for filing a Shelf Prospectus, including the
conditions for its validity, the period of validity, and the amendments to be made to the prospectus
during its validity period.
Abridged Prospectus : An Abridged Prospectus is a shorter version of the prospectus that contains
only the salient features of the full prospectus.
It is intended to provide a concise summary of the key information about the company’s securities
and the offer to potential investors.
Rule 3 of the Companies (Prospectus and Allotment of Securities) Rules, 2014: This rule outlines
the requirements for the contents of an Abridged Prospectus, including the information to be
included in the prospectus and the procedures for filing and circulation of the Abridged Prospectus.
Deemed Prospectus : A Deemed Prospectus refers to any document that fulfils the characteristics
of a prospectus and invites subscription or offer for securities of a company.
It includes documents like advertisements, pamphlets, circulars, or any other communication that
offers securities to the public for subscription or purchase.
Such documents are deemed to be prospectuses and are subject to the same regulatory requirements
as a regular prospectus.
Section 2(70) and Section 2(71): These sections define the term “prospectus” and “deemed
prospectus” respectively, and outline the broad scope of documents that may be considered as a
deemed prospectus.

LIFTING OF THE CORPORATE VEIL

The "lifting of the corporate veil" is a legal concept that refers to the judicial action of disregarding
the separate legal personality of a corporation.
In normal circumstances, a corporation is considered a distinct legal entity, separate from its
shareholders or members.
This separation, often referred to as the "corporate veil," provides certain legal protections, such as
limited liability.
However, there are situations where a court may decide to "lift the corporate veil" and look beyond
the corporate entity to hold individuals or entities behind the corporation personally liable for the
corporation's actions or debts.
This typically occurs when there is evidence of misuse or abuse of the corporate structure to engage
in fraudulent or wrongful activities, thereby justifying the piercing of the corporate veil to achieve
justice or prevent injustice.
Lifting the corporate veil is not a routine legal action and is generally reserved for cases where
there is a compelling need to hold individuals accountable for the actions of the corporation. It's a
legal doctrine aimed at preventing the misuse of the corporate form for improper purposes

PROTECTIONS FOR DEBENTURE HOLDERS UNDER THE COMPANIES ACT, 2013:

The Companies Act, 2013 in India includes provisions to safeguard the interests of debenture
holders. Some key provisions are:
1.Registration of Debenture Trustees (Section 71):
Debenture trustees, who act as intermediaries between the company and debenture holders, must be
registered with the Securities and Exchange Board of India (SEBI). They play a crucial role in
protecting the interests of debenture holders.
2.Creation of Debenture Redemption Reserve (Section 71):
Companies issuing debentures are required to create a Debenture Redemption Reserve (DRR) to
ensure that there are adequate funds available for the repayment of debentures at the time of
maturity.
3.Security for Debentures (Section 71):
If a company issues secured debentures, it is obligated to create a charge on its assets to provide
security for the debenture holders. This ensures that debenture holders have a claim on specific
assets if the company defaults.
4.Terms and Conditions in Trust Deed (Section 71):
The terms and conditions of debentures, including the manner of redemption, should be specified in
a trust deed. Debenture trustees are appointed to ensure that the company adheres to these terms and
conditions.
5.Issue of Debentures (Section 71): The issue of debentures must be authorized by a company's
board of directors through a resolution, and in some cases, approval from shareholders is required.
This ensures that debenture issuance is a well-considered decision.
6.Redemption of Debentures (Section 71):
The redemption of debentures must be in accordance with the terms specified at the time of
issuance. The company should redeem the debentures on maturity or as per the agreed-upon
schedule.