Offer of sale of shares by certain members of company
📚 Law Minded summary
This covers existing shareholders selling their own shares to the public, rather than the company issuing new ones.
They may do it in consultation with the Board, and the document offering the shares counts as a prospectus — so the same disclosure duties and the same liabilities apply.
The selling shareholders, not the company, bear the cost of the offer, in proportion to what each of them sells.
(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.
(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 ther eunder 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.
(3) The members, whether individu als 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 t hey shall reimburse the company all expenses incurred by it on this matter.
All sections in Chapter III — Prospectus and Allotment of Securities