Amended and updated notes on section 28 of Companies Act 2013. Detail discussion on provisions and rules related to offer of sale of shares by certain members of company.
Chapter III (Sections 23–42) of the Companies Act, 2013 (CA 2013) deals with the provisions related to prospectus and allotment of securities. Section 28 of CA 2013 provides for offer of sale of shares by certain members of company.
Recently, we have discussed in detail section 27 (Variation in terms of contract or objects in prospectus) of CA 2013. Today, we learn the provisions of section 28 of Companies Act 2013 read with the Companies (Prospectus and Allotment of Securities) Rules, 2014.
Section 28 of the Companies Act, 2013 has been notified by the Ministry of Corporate Affairs (MCA) vide Notification No. S.O. 902(E) issued dated 27.03.2014. This notification was come into force from 1st April, 2014 i.e. the commencement date of section 28 is 1-4-2014.
| 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. | 28 |
| Section Name | Offer of sale of shares by certain members of company |
| Monthly Updated Edition | Company Law PDF |
Section 28 of Companies Act 2013: Offer of sale of shares by certain members of company
Section 28 shall come into force on 1st April, 2014 vide Notification No. S.O. 902(E) dated 27-03-2014.
(1) 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 in accordance with such procedure as may be prescribed.
Such procedure has been prescribed in the Rule 8 of the Companies (Prospectus and Allotment of Securities) Rules, 2014.
(2) 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.
(3) 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.