Amended and updated notes on section 387 of Companies Act 2013. Detail discussion on provisions and rules related to dating of prospectus and particulars to be contained therein.
Chapter XXII (Section 379–393) of the Companies Act, 2013 (CA 2013) deals with the provisions related to companies incorporated outside India. Section 387 of CA 2013 provides for dating of prospectus and particulars to be contained therein.
Recently, we have discussed in detail section 386 (Interpretation) of CA 2013. Today, we learn the provisions of section 387 of the Companies Act 2013.
The provisions of section 387 are effective from 1st April, 2014. You may refer Notification No. S.O. 902(E) issued dated 27-03-2014. In this article, you will learn detail of the provisions of section 387 the Companies Act 2013 read with the Companies (Registration of Foreign Companies) Rules, 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. | XXII |
| Chapter Name | Accounts of Companies |
| Section No. | 387 |
| Section Name | Dating of prospectus and particulars to be contained therein |
| Monthly Updated Edition | Company Law PDF |
Dating of prospectus and particulars to be contained therein
Section 387 shall come into force on 1st April, 2014 vide Notification No. S.O. 902(E) issued dated 27.03.2014.
Section 387(1): No person shall issue, circulate or distribute in India any prospectus offering to subscribe for securities of a company incorporated or to be incorporated outside India, whether the company has or has not established, or when formed will or will not establish, a place of business in India, unless the prospectus is dated and signed, and—
- (a) contains particulars with respect to the following matters, namely: —
- (i) the instrument constituting or defining the constitution of the company;
- (ii) the enactments or provisions by or under which the incorporation of the company was effected;
- (iii) address in India where the said instrument, enactments or provisions, or copies thereof, and if the same are not in the English language, a certified translation thereof in the English language can be inspected;
- (iv) the date on which and the country in which the company would be or was incorporated; and
- (v) whether the company has established a place of business in India and, if so, the address of its principal office in India; and
- (b) states the matters specified under section 26:
Provided that sub-clauses (i), (ii) and (iii) of clause (a) of this sub-section shall not apply in the case of a prospectus issued more than two years after the date at which the company is entitled to commence business.
Section 387(2): Any condition requiring or binding an applicant for securities to waive compliance with any requirement imposed by virtue of sub-section (1), or purporting to impute him with notice of any contract, documents or matter not specifically referred to in the prospectus, shall be void.
Section 387(3): No person shall issue to any person in India a form of application for securities of such a company or intended company as is mentioned in sub-section (1), unless the form is issued with a prospectus which complies with the provisions of this Chapter and such issue does not contravene the provisions of section 388:
Provided that this sub-section shall not apply if it is shown that the form of application was issued in connection with a bona fide invitation to a person to enter into an underwriting agreement with respect to securities.
Section 387(4): This section —
- (a) shall not apply to the issue to existing members or debenture holders of a company of a prospectus or form of application relating to securities of the company, whether an applicant for securities will or will not have the right to renounce in favour of other persons; and
- (b) except in so far as it requires a prospectus to be dated, to the issue of a prospectus relating to securities which are or are to be in all respects uniform with securities previously issued and for the time being dealt in or quoted on a recognised stock exchange,
but, subject as aforesaid, this section shall apply to a prospectus or form of application whether issued on or with reference to the formation of a company or subsequently.
Section 387(5): Nothing in this section shall limit or diminish any liability which any person may incur under any law for the time being in force in India or under this Act apart from this section.
MCA Notification No. S.O. 3156(E) dated 5th August, 2021: By exercising the powers conferred by section 393A, the CG exempted the following from the provisions of section 387:-
- Foreign companies;
- Companies incorporated or to be incorporated outside India irrespective of a place of business in India,
insofar as they relate to the offering for subscription in the securities, requirements related to the prospectus, and all matters incidental thereto in the International Financial Services Centres (IFSC) set up under section 18 of the Special Economic Zones (SEZ) Act, 2005.