SECTION 29. PUBLIC OFFER OF SECURITIES TO BE IN DEMATERIALISED FORM
COMMENT: DEMATERIALISATION OF SECURITIES
The promoters of every public company making a public offer of any convertible securities may hold such securities only in dematerialised form:
Entire holding of convertible securities of the company by the promoters held in physical form up to the date of the initial public offer shall be converted into dematerialised form before such offer is made and thereafter such promoter shareholding shall be held in dematerialized form only.
(b) such other class or classes of 1[public] companies, shall issue the securities only in dematerialised form by complying with the provisions of the Depositories Act, 1996 (22 of 1996) and the regulations made there under.
In case of such class or classes of unlisted companies as may be prescribed, the securities shall be held or transferred only in dematerialised form in the manner laid down in the depositories act, 1996 and the regulations made there under.
Any company, other than a company mentioned in sub-section (1), may convert its securities into dematerialised form or issue its securities in physical form in accordance with the provisions of this Act or in dematerialised form in accordance with the provisions of the Depositories Act, 1996 (22 of 1996) and the regulations made there under.
OFFER OF SALE OF SHARES BY CERTAIN MEMBERS OF COMPANY
Where certain members of a company propose, in consultation with the Board of Directors to offer, in accordance with the provisions of any law for the time being in force, whole or part of their holding of shares to the public, they may do so by following certain procedure.
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 and all laws and rules made thereunder as to the contents of the prospectus and as to liability in respect of mis-statements in and omission from prospectus or otherwise relating to prospectus shall apply as if this is a prospectus issued by the company.
The members, whether individuals or bodies corporate or both, whose shares are proposed to be offered to the public, shall collectively authorise the company, whose shares are offered for sale to the public, to take all actions in respect of offer of sale for and on their behalf and they shall reimburse the company all expenses incurred by it on this matter.
OFFER OF SALE BY MEMBERS
(1) The provisions of Part I of Chapter III namely “Prospectus and Allotment of Securities” and rules made there under shall be applicable to an offer of sale referred to in section 28 except for the following, namely:-
|(a) the provisions relating to minimum subscription;|
|(b) the provisions for minimum application value;|
|(c) the provisions requiring any statement to be made by the Board of directors in respect of the utilization of money; and|
|(d) any other provision or information which cannot be compiled or gathered by the offer or, with detailed justifications for not being able to comply with such provisions.|
(2) The prospectus shall disclose the name of the person or persons or entity bearing the cost of making the offer of sale along with reasons.
Disclaimer: The Article is based on the Relevant Provisions and as per the information existing at the time of the preparation. In no event I shall be liable for any direct and indirect result from this Article. This is only a knowledge sharing initiative.
The Author – CS Deepak Seth (Associate Partner at Helpinghands Professionals LLP) and can be reached at [email protected] or 9910248911.