Short Notes on Public Offer of Securities by a Company

In offer for sale method, a company allots shares to issue houses or other intermediaries or the promoters with a view to such shares being offered for sale to the public by such issue houses or the promoters. In certain situations, this offer for sale is deemed as a public offer by the company.

Right issue is the offer for subscription of shares made by a public company to its existing equity shareholders as a matter of their right. In fact, it is obligatory for a public company to make such an offer in case of further issue of shares.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

Private placement is issuing of shares privately to the friends, relatives or acquiesces of the promoters.

A public company which does make public offer of shares, need not issue a prospectus; in such a case, it will have to file a Statement in Lieu of Prospectus with the Registrar of Companies.

A private company, by its very constitution, is prohibited from inviting the monetary participation of the public, and, therefore, it need not issue a prospectus or file a statement in lieu of prospectus.