The Board of Directors of Fun Unlimited Ltd has met for finalization of its Prospectus, During the course of meeting, the Chairman Mr. Water wants to know from you, Secretary of the Company, what manner and report is to
CS Professional · Advanced Company Law and Practice · PYQS · June 2018
The Board of Directors of Fun Unlimited Ltd has met for finalization of its Prospectus, During the course of meeting, the Chairman Mr. Water wants to know from you, Secretary of the Company, what manner and report is to be disclosed in the prospectus about acquisition of a land by the Company for which advance has been paid to third party. Please answer to the Chairman with reference to the provisions of the Companies Act, 2013.
Answer & Explanation:
Rule 5(1)(c) of the Companies (Prospectus and Allotment of Securities) Rules, 2014, other matters and reports to be stated in the prospectus:- The prospectus shall include the following other matters and reports, namely:- In purchase or acquisition of any immoveable property including indirect acquisition of immoveable property for which advances have been paid to even third parties, disclosures regarding- the names, addresses, descriptions and occupations of the vendors; the amount paid or payable in cash, to the vendor and, where there is more than one vendor, or the company is a sub-purchaser, the amount so paid or payable to each vendor, specifying separately the amount, if any, paid or payable for goodwill; the nature of the title or interest in such property proposed to be acquired by the company; and the particulars of every transaction relating to the property, completed within the two preceding years, in which any vendor of the property or any person who is, or was at the time of the transaction, a promoter, or a director or proposed director of the company had any interest, direct or indirect, specifying the date of the transaction and the name of such promoter, director or proposed director and stating the amount payable by or to such vendor, promoter, director or proposed director in respect of the transaction. In the instant case, although Fun Unlimited Limited has given advance for acquisition of land and not purchase the land, nonetheless, this is an important information for the prospective investors, accordingly, necessary details including litigation, if any pertaining to the said piece of land should be disclosed in the prospectus.
Topics: Prospectus and Allotment of Securities
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