Rapid Revision of CA Inter Law Chapter 3

Aug 30, 2024

Lecture Note on Rapid Revision of Chapter 3 - CA Inter Law

Introduction

  • Welcome to today's rapid revision.
  • We will summarize and complete the entire Chapter 3 in an effective way.
  • This revision is for May 24 and November 24 students.

Book Introduction

  • The book presents CA Inter Law concisely in 200 pages.
  • It provides a summary of the bare act language, forms, and sections.

Revision of Prospectus

  • Starts from Section 23 to 42.
  • Broadly divided into two parts:
    • Public Offer (Section 23-41)
    • Private Placement (Section 42)

Public and Private Company

  • Public Company:
    • Can do Public Offer, Private Placement, Bonus Issue, Right Issue.
  • Private Company:
    • Cannot give a Public Offer, only Private Placement or Right/Bonus Issue.

Overseas Direct Listing

  • Some companies are allowed to list directly abroad.
  • Other companies will have to issue GDRs.

Definition of Security and Prospectus

  • Security: Shares, Debentures, etc.
  • Prospectus: Any document soliciting money from the public.

Section 24

  • SEBI regulations apply when the company is in the process of listing.

Deemed Prospectus

  • Definition and impact of Deemed Prospectus.
  • When shares are allotted and sold to the public.

Section 26

  • What details should be in the Prospectus:
    • Must be dated and signed.
    • Reports and information as prescribed by SEBI should be included.

Information Memorandum

  • Associated with the Shelf Prospectus.
  • Information like Charges, Financial Changes, etc.

Section 29

  • Convert shares into Demat Form.
  • Demat is mandatory for Public Company.

Section 30

  • Include the fundamentals of MOA during the advertisement.

Section 31-35

  • Concepts of Shelf Prospectus and Red Herring Prospectus.
  • Penalties for Misleading Prospectus:
    • Section 34: Criminal Liability
    • Section 35: Civil Liability

Section 36-37

  • Penalties for Fraudulent Inducement.
  • Suit for Compensation in Case of Misleading Prospectus.

Section 39-40

  • Allotment rules and Conditions.
  • Application and permission required for Stock Exchange.

Underwriting Commission

  • Conditions and rules of Underwriting Commission.

Section 41

  • Introduction to Global Depository Receipts (GDR).

Section 42

  • Process and rules of Private Placement.
  • Maximum 200 people, for identified persons.

Important Points

  • No public invitation for Private Placement.
  • Start a new one only after completing or withdrawing the previous Private Placement.

Conclusion

  • This revision will assist in quick revision during exam time.