Important Points on the Basics of Company Law Part-2

  1. Shelf Prospectus section 31, Red herring prospectus section 32.
  2. Oral Invitation is not a prospectus.
  3. Information memorandum+ shelf prospectus =Prospectus.
  4. Untrue statement in the prospectus will result in imprisonment of 10 years
  5. A company proposing to issue red herring prospectus shall file it with the registrar at least 3 days prior to the opening of the subscription list and the offer.
  6. Prospects issued after 90 days of filing is not valid.
  7. If the provision related to prospectus are contravened then fine up to 50 K to 3 L
  8. A document that indicates the possession of the shareholders on the specified number of shares held by them is called share certificate. A share warrant gives the same right to the bearer.
  9. When a call is made, Call letter or call notice is sent.
  10. Equity shares are ordinary shares.
  11. Equity shareholders can vote in the election of directors.
  12. Shelf prospectus is valid for 12 months and a maximum of 4 issues can be made.
  13. Uncalled capital which is to be called at winding up is Reserve Capital.
  14. Allotted and issued is subscribed capital.
  15. Ownership pass of title of security due to the law is called transfer.
  16. Aggregate of fully paid shares legally consolidated is called stock.
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