As per Section 40 of Indian Companies Act 2013 every company making public offer shall dealt with the securities through stock exchange. Provision in the Companies Act 2013 related to Securities to be dealt with Stock Exchanges is as under.
(1) Every company making public offer shall, before making such offer, make an application to one or more recognised stock exchange or exchanges and obtain permission for the securities to be dealt with in such stock exchange or exchanges.
(2) Where a prospectus states that an application under sub-section (1) has been made, such prospectus shall also state the name or names of the stock exchange in which the securities shall be dealt with.
(3) All monies received on application from the public for subscription to the securities shall be kept in a separate bank account in a scheduled bank and shall not be utilised for any purpose other than--
(a) for adjustment against allotment of securities where the securities have been permitted to be dealt with in the stock exchange or stock exchanges specified in the prospectus; or
(b) for the repayment of monies within the time specified by the Securities and Exchange Board, received from applicants in pursuance of the prospectus, where the company is for any other reason unable to allot securities.
(4) Any condition purporting to require or bind any applicant for securities to waive compliance with any of the requirements of this section shall be void.
(5) If a default is made in complying with the provisions of this section, the company shall be punishable with a fine which shall not be less than five lakh rupees but which may extend to fifty lakh rupees and every officer of the company who is in default shall be punishable 1*** or with fine which shall not be less than fifty thousand rupees but which may extend to 2 [three lakh rupees].
(6) A company may pay commission to any person in connection with the
subscription to its securities subject to such conditions as may be prescribed.
1. The words "with imprisonment for a term which may extend to one year or" omitted by Act 29 of 2020, s. 7 (w.e.f. 21-12- 2020).
2. Subs. by s. 7, ibid., for "three lakh rupees, or with both" (w.e.f. 21-12-2020).
How to authenticate documents, proceedings and contracts of a Company Section 21 of Indian Companies Act 2013
How to execute bills of exchange etc Section 22 of Indian Companies Act 2013
What are the methods to issue securities by Companies Section 23 of Indian Companies Act 2013 - Public offer and Private Placement
What are the Powers of Securities and Exchange Board (S E B I) to regulate, issue and transfer of securities Section 24 of Indian Companies Act 2013
Document containing offer of securities for sale to be deemed prospectus Section 25 of Indian Companies Act 2013
What are the matters to be stated in Prospectus Section 26 of Indian Companies Act 2013. Contents of Prospectus. What is the provision for punishment against violation of law regarding issue of Prospectus
What is the effect of variation in terms of contract or objects in prospectus Section 27 of Indian Companies Act 2013
Can members of a company offer shares for sale Section 28 of Indian Companies Act 2013 - offer of sale of shares by certain members of the Company
Public offer of securities should be in dematerialized form. Section 29 of Indian Companies Act 2013
What are the methods to advertise Prospectus What are the conditions Section 30 of Indian Companies Act 2013
What is Shelf Prospectus Who can file prepare and file it What are the conditions Section 31 of Indian Companies Act 2013
What is Red Herring Prospectus Who can issue red herring prospectus What are the terms Section 32 of Indian Companies Act 2013
How to issue Application forms for Securities What is the procedure Section 33 of Indian Companies Act 2013
What is the criminal liability for mis statement in Prospectus What is the punishment Section 34 of Indian Companies Act 2013
What is the Civil liability for mis statement in the Prospectus Who is punishable Section 35 of Indian Companies Act 2013
What is the punishment for fraudulently inducing persons to invest money Section 36 of Indian Companies Act 2013
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How to dealt with Securities Is it necessary to deal with Stock Exchanges Section 40 of Indian Companies Act 2013. What is the punishment for violation?