statement lieu of prospectus

anshul sangal (Querist) 21 January 2010 This query is : Resolved
To whom statement in lieu of prospectus is issued?Can it issued to director of company?

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A V Vishal (Expert) 21 January 2010
A private limited company or a company having no share capital can commence its business immediately after it has been incorporated. However, a public limited company can commence its activities only after it has obtained Certificate of Commencement of Business. For this purpose, the following additional formalities have to be complied with :-

1. If a company has share capital and has issued public subscription, then :-

Shares upto the amount of minimum subcription must be alloted
Every director has paid to the company on each of the shares which he has taken the same amount as the public have paid on such shares
No money is or may become payable to the applicants of shares or debentures for failure to apply for or to obtain permission to deal in those shares or debentures in any recognised stock exchange.
A statutory declaration in Form 19 signed by one director or the employee - company secretary or a Company secretary in whole time practice that the above provisions have been complied with must be filed

2. If a company has share capital but has not issued for public subscription, then :-

It must file a statement in lieu of prospectus with the Registrar of Companies
Every director has paid to the company on each of the shares which he has taken the same amount as the other members have paid on such shares
A statutory declaration in Form 20 signed by one director or the employee - company secretary or a Company secretary in whole time practice that the above provisions have been complied with must be filed
Once the above provisions have been complied with, the Registrar of Companies grants "Certificate of Commencement of Business" after which the company can commence its activities.

In order to obtain COB, a public company shall file the following documents with the Registrar of Companies as desired by section 149:

(1) A prospectus/statement in lieu of prospectus as the case may be along with following documents:

(a) list of the members of the company with their shareholdings;

(b) confirmation for paid up share capital to the extent of Rs. 5,00,000 and proof thereof, viz copy of bank statement etc.

(c) list of Directors, Manager, Secretary, Auditors and changes among them, if any;

(d) consent of the Auditors to include their name in the Prospectus/Statement in lieu of Prospectus;

(e) copy of the agreements for appointment of Managing Director, Underwriters, contracts entered into by the promoters before incorporation of the company, etc. if any;

(f) printed and certified copy of the Memorandum and Articles of Association of the company;

(g) details of the preliminary expenses incurred by the company;

(h) power of attorney to make corrections in the Prospectus/Statement in lieu of prospectus and to obtain certificate for commencement of business from the Registrar of Companies;

(i) certified copy of the resolution passed by the Board for approval of prospectus /statement in lieu of prospectus for filing with the Registrar.

(2) A duly verified declaration on stamp paper that provisions of section 149 of the Act have been complied with, by one of the directors or secretary or, where there is no secretary, by a secretary in whole time practice, in e-Form 19/20 as the case may be.