Amended and updated notes on section 389 of Companies Act 2013. Detail discussion on provisions and rules related to registration of prospectus.
Chapter XXII (Section 379–393) of the Companies Act, 2013 (CA 2013) deals with the provisions related to companies incorporated outside India. Section 389 of CA 2013 provides for registration of prospectus.
Recently, we have discussed in detail section 388 (Provisions as to expert’s consent and allotment) of CA 2013. Today, we learn the provisions of section 389 of the Companies Act 2013.
The provisions of section 389 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 389 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. | 389 |
| Section Name | Registration of prospectus |
| Monthly Updated Edition | Company Law PDF |
Registration of prospectus
Section 389 shall come into force on 1st April, 2014 vide Notification No. S.O. 902(E) issued dated 27.03.2014.
No person shall issue, circulate or distribute in India any prospectus offering for subscription in 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 before the issue, circulation or distribution of the prospectus in India, a copy thereof certified by the chairperson of the company and two other directors of the company as having been approved by resolution of the managing body has been delivered for registration to the Registrar and the prospectus states on the face of it that a copy has been so delivered, and there is endorsed on or attached to the copy, any consent to the issue of the prospectus required by section 388 and such documents as may be prescribed.
Notification No. S.O. 3156(E) [05.08.2021]: In exercise of the powers conferred by section 393A, the Central Government has now exempted the following companies for complying the provisions of section 389:-
- 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.