Under section 40(1) of the Companies Act, 2013, before making a public offer of securities, a company must apply to and obtain permission from which body for the securities to be dealt with?
Question and options
Under section 40(1) of the Companies Act, 2013, before making a public offer of securities, a company must apply to and obtain permission from which body for the securities to be dealt with?
One or more recognised stock exchanges
The Securities and Exchange Board of India
A registered depository
The Registrar of Companies
Answer and explanation
Section 40(1) requires every company making a public offer to apply, before the offer, to one or more recognised stock exchanges and obtain permission for the securities to be dealt with there. SEBI regulates the issue under its regulations and the prospectus is filed with the Registrar, but the dealing permission comes from the exchange.
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