Amended and updated notes on section 23 of Companies Act 2013. Detail discussion on provisions and rules related to public offer and private placement.
Chapter III (Sections 23–42) of the Companies Act, 2013 (CA 2013) deals with the provisions related to prospectus and allotment of securities. Section 23 of CA 2013 provides for public offer and private placement.
Recently, we have discussed in detail section 22 (Execution of bills of exchange, etc.) of CA 2013. Today, we learn the provisions of section 23 of Companies Act 2013.
Section 23 of the Companies Act, 2013 has been notified by the Ministry of Corporate Affairs (MCA) vide Notification No. S.O. 2754(E) issued dated 12.09.2013. This notification was come into force from 12th September, 2013 i.e. the commencement date of section 23 is 12-9-2013.
| Name of Act | The Companies Act 2013 |
|---|---|
| Enacted by | Parliament of India |
| Administered by | Ministry of Corporate Affairs (MCA) |
| Number of Chapters | 29 |
| Number of Sections | 484 (470-43+57) |
| Number of Schedules | 7 |
| You are reading: | |
| Chapter No. | III |
| Chapter Name | Prospectus and Allotment of Securities |
| Section No. | 23 |
| Section Name | Public offer and private placement |
| Monthly Updated Edition | Company Law PDF |
Section 23 of Companies Act 2013: Public offer and private placement
Section 23 shall come into force on 12th September, 2013 vide Notification No. S.O. 2754(E) dated 12.09.2013 except clause (b) of sub-section (1) and sub-section (2) which shall come into force on 1st April, 2014 vide Notification No. S.O. 902(E) issued dated 27.03.2014.
(1) A public company may issue securities—
- (a) to public through prospectus (herein referred to as “public offer”) by complying with the provisions of this Part; or
- (b) through private placement by complying with the provisions of Part II of this Chapter; or
- (c) through a rights issue or a bonus issue in accordance with the provisions of this Act and in case of a listed company or a company which intends to get its securities listed also with the provisions of the Securities and Exchange Board of India Act, 1992 and the rules and regulations made thereunder.
(2) A private company may issue securities—
- (a) by way of rights issue or bonus issue in accordance with the provisions of this Act; or
- (b) through private placement by complying with the provisions of Part II of this Chapter.
Explanation: For the purposes of this Chapter, “public offer” includes initial public offer or further public offer of securities to the public by a company, or an offer for sale of securities to the public by an existing shareholder, through issue of a prospectus.