SEBI Act. In 1992 issue of capital to thepublic by companies has been heed from the requirement of prior approval of the Controller of Capital Issues (CCI). The CCI was replaced by die Secnrities and Exchange Board of India iSEBI) which was established in ter us of SEBI Act 1992. SEBI has been conferred wide powers to make rules and regulations to protect the interests of investors in securities and to regulate the securities market. With a view to ensuring protection of investors, SEBi has issued 'guidelines for disclosure and investor protect ion7 on 11th June, 1992 for compliance by the companies ma capital issues to the public. Accordingly, these guidelines must be complied with before uia a pubhc offer for sale of shares and debentures
Sbhscription stage. After conforming to the goidelines for disclosure and investor protection" issued by SEBi (Securities and Exchange Board ) regarding public issues of capital the Directors file a copy of the 'iprospectus' with the Registrar and invite public to subscribe to the shares of the company by putting the 'prospectus ati6n Applications for shares are received from the public though the company s banners and if the subscribed capital is at least equal to minimum ion amount of 90 per cent of the capital issue, and other conditions of a valid allotment are fiuhfilled, the directors pass a formal resolution of aliotmer Allotmertt letters are then posted, return of allotment is filed with the Registrar and share certificates are issued to the ailot!ees m exchange for dleallottnent letters. if the subscribed capita] is less than die minimum subscription or the compamy could not obtain the mluimum subscription within 60 days from the date of closure of the issue, all moneys will be refmlded and no allotment cam be done.
It may be noted that a public company have a share capital, but not issuing a 'prospectus' to thepllblic has iofiie ith ffie Registrar a'Statemeiit in lien of Prospects' (instead of a prospectus) at least three days before the directors proceed to pass the first allotment resolution.-Of course, the remaining procedure regarding posting of allotment lettersj filing return of allotment, and issue of share certificate is to be followed by such a compamy also.
DUTiEs OF THE SECRETARY AT THE CAPITAL SUBSCRIPTION STAGE
The duties of the Secretary at the capital subscription stage are as fo31Ows:
1. 70 arrange for convening amd holding of the first meeting of the Board of Directors to deal with the followmg business and pass necessary resolutions: : .: (a) Appointment of secretaiy. in most cases the appointment of pratem secretary (who is appointed at the promotion stage) is confirmed.
fb) Adoption of prehminarv contracts
(c) Approval of the design of the Common Seal of the Compamy and authorlsing the custody thereof
120 I 'S: SECRETARIAL PRACTICE
18. To issue the prospectus to the pubhc within 90 dad} few of registration with the Registrar
19. To submit an application to the Stock Exchange for set -listingofsharesthreat beforetheissueofprospectus if the compare A to offer shares to the public for subscription by the issue of a prospectus
20. To arrange with the bankers to receive the share application fork and inoneys'firom the public.
21. To arrange a Board of Directors meeting-as soon as the subscribe capital becomes equal to 'nninirnum subscription' amount as disclosed in th prospectus and get the necessary resolntioll passed for allotment of shares.
22. To issue letters of allotntentregret to applicants for shares as per the decision of the Board of Directors.
23. To arrange for refund of application moneys, where shares are no allotted or are partly allotted.
• , 24. To file a 'return of allotments' with the P.egistrar of Companies.
25. To arrange for the issue of shares certificates to the allottees in due course and get a Register of Members prepared. :
MARITAL STRUCTURE OF A COMPANY;
. Q. 23. Describe different kinds of Capita L Ans. Share capital IS the capital raised by a company through Issue of shares in particular Only companies limited by shares and registered with a share capital have the authority- of raising capital through issue of shares.Share capital can be received either at the time of the formation of the company for col mnenc ung the business or, subsequently, for the expansion of business.
Capital structure refers to the division and snb-division of capital into difreront kinds of shares through which the company in authorized to raise its capital. The issue of debentures, inviting public deposits and other forms of loan are also the part of capital structure of a compamy with the help of which a company raises its required finances.
FORM OF CAPiTAL