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Shelf Prospectus and Detail Information

Shelf Prospectus and Detail Information

Shelf Prospectus is a type of public offering where certain issuers are allowed to offer and sell securities to the public without a separate prospectus for each act of offering.

The provisions relating to the issue of Shelf Prospectus are contained in Section 31 of the Companies Act, 2013.

Shelf Prospectus and Detail Information

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Shelf Prospectus

Shelf Prospectus and Detail Information

Definition of Shelf Prospectus
Filing of Shelf Prospectus

Definition of Shelf Prospectus

As per the Explanation given in Section 31 of the Companies Act, 2013, the expression “shelf prospectus” means a prospectus in respect of which the securities or class of securities included therein are issued for subscription in one or more issues over a certain period without the issue of a further prospectus.

Filing of Shelf Prospectus

Any class or classes of companies, as the Securities and Exchange Board may provide by regulations in this behalf, may file a shelf prospectus with the Registrar at the stage of the first offer of securities. The validity of the Shelf Prospectus shall be for a period not exceeding one year which shall commence from the date of opening of the first offer of securities under that prospectus. In respect of a second or subsequent offer of such securities issued during the period of validity of that prospectus, no further prospectus is required.

For any subsequent issue, the company shall file an “Information Memorandum”. This information memorandum shall contain all material facts relating to –

  • new charges created; and
  • changes in financial position of the company from first or previous offer to this subsequent offer of securities under this Shelf Prospectus.

According to Rule 10 of the Companies (Prospectus and Allotment of Securities) Rules, 2014, the information memorandum shall be prepared in Form PAS-2 and filed with the Registrar along with the fee as provided in the Companies (Registration Offices and Fees) Rules, 2014 within one month prior to the issue of a second or subsequent offer of securities under the shelf prospectus.

It may be possible that a company or any other person has received applications for the allotment of securities along with advance payments of subscription before the filing of Information memorandum. In these cases, the company or other person shall intimate the changes to such applicants and if they express a desire to withdraw their application, the company or other person shall refund all the monies received as subscription within fifteen days.

When an offer of securities is made on shelf prospectus, the information memorandum together with the shelf prospectus shall be deemed to be a prospectus.

The concept of shelf prospectus will save expenditure and time of the companies in issuing a new prospectus every time they wish to issue securities to the public within a period of one year.

Shelf Prospectus

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