Securities to be dealt with in stock exchanges
(1)
Every companycompany making public offer shall, before making such offer, make an application to one or more recognised stock exchangerecognised stock exchange or exchanges and obtain permission for the securitiessecurities to be dealt with in such stock exchange or exchanges.
(2)
Where a prospectusprospectus states that an application under sub-section (1) has been made, such prospectus shall also state the name or names of the stock exchange in which the securities shall be dealt with.
(3)
All monies received on application from the public for subscription to the securities shall be kept in a separate bank account in a scheduled bankscheduled bank and shall not be utilised for any purpose other than—
(a)
for adjustment against allotment of securities where the securities have been permitted to be dealt with in the stock exchange or stock exchanges specified in the prospectus; or
(b)
for the repayment of monies within the time specified by the Securities and Exchange BoardSecurities and Exchange Board , received from applicants in pursuance of the prospectus, where the company is for any other reason unable to allot securities.
(4)
Any condition purporting to require or bind any applicant for securities to waive compliance with any of the requirements of this section shall be void.
(5)
If a default is made in complying with the provisions of this section, the company shall be punishable with a fine which shall not be less than five lakh rupees but which may extend to fifty lakh rupees and every officerofficer of the company who is in default shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than fifty thousand rupees but which may extend to three lakh rupees t hree lakh rupees, or with both .
(6)
A company may pay commission to any person in connection with the subscription to its securities subject to such conditions as may be prescribed. (Effective from 01-04-2014)
Notes, amendments & references (3)
with imprisonment for a term which may extend to one year or Omitted vide Companies (Amendment) Act, 2020 dated 28.09.2020 with effect from 21.12.2020. To view the Act, Click Here . To view the commencement notification, Click Here .
Substituted vide Companies (Amendment) Act, 2020 dated 28.09.2020 with effect from 21.12.2020. To view the Act, Click Here . To view the commencement notification, Click Here .
Refer rule 13 of the Companies (Prospectus and Allotment of Securities) Rules,2014. To view the rule, Click Here