Amended and updated notes on section 39 of Companies Act 2013. Detail discussion on provisions and rules related to allotment of securities by 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 39 of CA 2013 provides for allotment of securities by company.
Recently, we have discussed in detail section 38 (Punishment for personation for acquisition, etc., of securities) of CA 2013. Today, we learn the provisions of section 39 of Companies Act 2013 read with the Companies (Prospectus and Allotment of Securities) Rules, 2014.
Section 39 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 39 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. | 39 |
| Section Name | Allotment of securities by company |
| Monthly Updated Edition | Company Law PDF |
Section 39 of Companies Act 2013: Allotment of securities by company
Section 39 shall come into force on 12th September, 2013 vide Notification No. S.O. 2754(E) dated 12.09.2013 except sub-section (4) which shall come into force on 1st April, 2014 vide Notification No. S.O. 902(E) issued dated 27.03.2014.
(1) No allotment of any securities of a company offered to the public for subscription shall be made unless the amount stated in the prospectus as the minimum amount has been subscribed and the sums payable on application for the amount so stated have been paid to and received by the company by cheque or other instrument.
(2) The amount payable on application on every security shall not be less than five per cent of the nominal amount of the security or such other percentage or amount, as may be specified by the Securities and Exchange Board by making regulations in this behalf.
(3) If the stated minimum amount has not been subscribed and the sum payable on application is not received within a period of thirty days from the date of issue of the prospectus, or such other period as may be specified by the Securities and Exchange Board, the amount received under sub-section (1) shall be returned within such time and manner as may be prescribed.
Application money shall be refunded within 15 days from the closure of the issue and the same will be credited to the bank a/c from which the subscription was remitted. See Rule 11 of the Companies (Prospectus and Allotment of Securities) Rules, 2014.
(4) Whenever a company having a share capital makes any allotment of securities, it shall file with the Registrar a return of allotment in such manner as may be prescribed.
Return of allotment shall be filed in Form PAS-3 within 30 days. See Rule 12 of the Companies (Prospectus and Allotment of Securities) Rules, 2014.
(5) In case of any default under sub-section (3) or sub-section (4), the company and its officer who is in default shall be liable to a penalty, for each default, of one thousand rupees for each day during which such default continues or one lakh rupees, whichever is less.