Explain the due diligence for issue of securities by a Company.

A public company may issue securities to public through prospectus Public offer by complying with the provisions of Part I of chapter III Prospectus and Allotment of Securities; or through private placement by complying with the provisions of Part II of chapter III - Prospectus and Allotment of Securities; or through a rights issue or a bonus issue in accordance with the provisions of the Companies Act, 2013 ('the Act') and in case of a listed company or a company which intends to get its securities listed also with the provisions of the Securities and Exchange Board of India Act, 1992 and the rules and regulations made thereunder, the key regulation governing the issue of securities and preparation of financial information are SEBI (Issue of Capital and Disclosure Requirement) Regulations, 2018 SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015. SEBI ICDR Regulations provide the guidelines relating to conditions for various kind of issue including public and right issue, the ICDR regulations provide detailed provisions: relating to public issue such as conditions an Initial Public offer (IPO) and Further Public Offer (FPO) conditions relating to pricing in public offering. Conditions governing promoters contribution, restriction on transferability of promoters contributions, minimum offer to public, reservations, manner of disclosures in offer documents etc. SEBI (LODR) Regulations, 2015 lay down the broad principles for periodic disclosure to be given by the listed entities operating in different segments of capital markets. A private company may issue securities by way of rights issue or bonus issue in accordance with the provisions of the Act; or through private placement by complying with the provisions of Part II of Chapter III Prospectus and Allotment of Securities & Chapter IV-Share Capital & Debentures of Companies Act, 2013. The scope and comprehensiveness of the Issue of Securities due diligence is important not only from a legal standpoint to avoid liability but also from a reputational perspective as the reputation of the company and its promoters and other participants may be significantly vanished, if on a later date it appears that the company and other participants are failed to uncover and disclose to prospective investors critical issues relating to the issuer or the Securities. While the specific requirements in connection with issue of securities are different under the Companies Act, 2013 and SEBI Laws & Regulations made thereunder, any non-compliance in these regulations are generally impose liability if the offering memorandum or prospectus contains a materially incorrect or misleading statement or omits a material fact. However in certain conditions the complete issue of securities stand cancelled. The violation of any applicable liability provisions may result in liability for offering participants, in particular the issuer and the underwriters. These liability provisions emphasize the need for careful preparation of all materials to be used in issue of securities offerings, in particular the offering memorandum or prospectus.