Companies Act Section 33 — Issue of application forms for securities
CHAPTER III PROSPECTUS AND ALLOTMENT OF SECURITIES
Commercial / Corporate
Summary
Sub-section (1) states that a company cannot issue a form for applying to buy its securities unless the form comes with an abridged prospectus. An abridged prospectus is a shorter version of the full prospectus that gives key information about the securities.
The proviso to sub-section (1) creates two exceptions where this requirement does not apply. Under clause (a), the requirement does not apply if the application form was issued as part of a genuine invitation for someone to enter into an underwriting agreement for those securities. Under clause (b), the requirement does not apply if the securities were not offered to the public at all.
Sub-section (2) says that if any person asks for a copy of the prospectus before the subscription list closes and the offer ends, the company must provide that copy to them.
Sub-section (3) provides that if a company fails to follow the requirements of this section, it will have to pay a penalty of fifty thousand rupees for each such failure.
Official Text
(1) No form of application for the purchase of any of the securities of a company shall be issued unless such form is accompanied by an abridged prospectus:
Provided that nothing in this sub-section shall apply if it is shown that the form of application was issued—
(a) in connection with a bona fide invitation to a person to enter into an underwriting agreement with respect to such securities; or
(b) in relation to securities which were not offered to the public.
(2) A copy of the prospectus shall, on a request being made by any person before the closing of the subscription list and the offer, be furnished to him.
(3) If a company makes any default in complying with the provisions of this section, it shall be liable to a penalty of fifty thousand rupees for each default.