Chapter III
PROSPECTUS AND ALLOTMENT OF SECURITIES
[Sections 23 to 42]

Provisions of the Companies Act, 2013:
Section 23: Public offer and private placement.
For this provision, no rules are prescribed the Companies Rules, 2013.
[Section 23 (partially) is brought to force with effect from September 12, 2013. Part of provisions, stating applicability of Part II and rights issue or bonus issue are not brought to force].

Corresponding provisions of the Companies Act, 1956:
No such provision.

Corresponding provisions of the English Companies Act, 2006:
No such provision.

Applicability:
This section is applicable to private companies and public companies.

Section 23 provides applicability of Chapter III to private and public companies in case of offer of securities.

Part I of Chapter III, comprising of sections 23 to 41, is applicable to public companies for issue of its securities to public through prospectus ((Section 23(1)(a) )). It is referred to as ‘public offer’. And public offer, for the purpose of Chapter III, includes issue of securities to public through prospectus by public company by way of initial public offer (IPO) or further public offer (FPO). Public offer also includes issue of securities to public through prospectus by way of offer for sale by an existing shareholder ((Explanation to Section 23)).

Part II of Chapter III, comprising of only section 42, is applicable to public companies and private companies for issue of its securities on private placement basis ((Section 23(1)(b) and Section 23(2)(b) respectively)).

Where a Public company or a private company decides to issue its securities by way of rights issue or bonus issue, the same shall be as per provisions of the Companies Act, 2013 ((Section 23(1)(c) and Section 23(2)(a) respectively )). And in case of a listed company or a company intending to get its securities listed, it shall also comply with the Securities and Exchange Board of India Act, 1992 and the rules and regulations framed thereunder relating to issue of securities by way of rights issue or bonus issue ((Section 23(1)(c) )).