Section 28: Offer of sale of shares by certain members of company
This section is for regulating the offer of sale of shares by certain members of a company to the public.
The section, clause by clause
What the section says
In plain terms
(1)Where certain members of a company propose, in consultation with the Board of Directors to offer, in accordance with the provisions of any law for the time being in force, whole or part of their holding of shares to the public, they may do so in accordance with such procedure as may be prescribed.
Certain members of a company can offer their shares to the public after consulting the Board of Directors and following a prescribed procedure.
(2)Any document by which the offer of sale to the public is made shall, for all purposes, be deemed to be a prospectus issued by the company and all laws and rules made thereunder as to the contents of the prospectus and as to liability in respect of mis-statements in and omission from prospectus or otherwise relating to prospectus shall apply as if this is a prospectus issued by the company.
The document used to make the offer of sale to the public is considered a prospectus and is subject to the same laws and rules as a prospectus issued by the company.
(3)The members, whether individuals or bodies corporate or both, whose shares are proposed to be offered to the public, shall collectively authorise the company, whose shares are offered for sale to the public, to take all actions in respect of offer of sale for and on their behalf and they shall reimburse the company all expenses incurred by it on this matter.
The members offering their shares must authorize the company to take actions on their behalf and reimburse the company for all expenses incurred.
The right-hand column is written from the section text, not quoted from it, and it has no legal force. Where the two differ, the left-hand column is the law.
Amendment notes
- 1. The word “public” omitted by Act 22 of 2019, s. 7 (w.e.f. 15-8-2019).
- 2. Ins. by s. 7, ibid. (w.e.f. 15-8-2019).
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Reproduced from the official India Code print for reference. Check the current text on India Code before you rely on it, and read the section alongside its Rules. Nothing here is legal advice.