companies act
sajjan
(Querist) 23 August 2010
This query is : Resolved
whether public company can issue shares for more than 50 members without issuing the prospectus
A V Vishal
(Expert) 24 August 2010
In terms of section 3(1)(iv) of the Companies Act, 1956 a public company means a company which is not a private company and has a minimum paid-up capital of five lakh rupees or such higher paid-up capital as may be prescribed. A private company which is subsidiary of a public company is also a public company.
At least 7 persons are required to form a public company.
A prospectus or a statement in lieu thereof has to be filed with the Registrar of Companies before allotment of shares.
It has to obtain Certificate of Commencement of Business from the Registrar of Companies before it can commence business on incorporation.
It has to hold a statutory meeting of members and file a Statutory Report with the Registrar of Companies.
Any member of the public who is willing to pay the price may acquire its shares or debentures.
Its shares are easily transferable and since these can be quoted on a recognised stock exchange, their liquidity is enhanced.
It can have any number of members and it is easy for it to raise capital through public subscriptions.
It can obtain loans from financial instituations and banks.
It shall have at least three Directors.
Daksh
(Expert) 24 August 2010
Thanks Vishal for enlightening us all.
Best Regards
Daksh
DEFENSE ADVOCATE.-firmaction@g
(Expert) 24 August 2010
The querry is for issue of prosepectus , it has to be issued and without first approval of concerened stock exchange the shares can not be traded. This is got listing agreement which put no of responsibilites on the co for regular PUBLIC disclosure of accounts and information with intimation to the stock exchange.
