CIA on Prospectus etc.

What is a Public Offer?

• Capital raised through a rights issue

• Capital raised through a bonus issue

• Capital raised from a selected group of persons

• Capital raised from the public at large

Which section allows a public company to issue securities through a prospectus?

• Section 23

• Section 42

• Section 31

• Section 35

What is a Deemed Prospectus?

• A prospectus that is not issued by the company

• A document that is deemed to be a prospectus when securities are offered for sale

• A prospectus that is issued only to existing shareholders

• A prospectus that includes complete particulars of securities

What is the maximum validity period for a Shelf Prospectus?

• Six months

• One year

• Three years

• Two years

What does a Red Herring Prospectus not include?

• The name of the company

• The closing price of the securities

• The total capital raised

• Complete particulars of the quantum of securities

What is the penalty for a company that defaults in complying with Section 33?

• One lakh rupees

• Fifty thousand rupees

• No penalty

• Ten thousand rupees

What is the definition of Equity Share Capital?

• Share capital with preferential rights

• All share capital which is not preference share capital

• Share capital issued at a discount

• Share capital with no voting rights

Under what condition do preference shareholders gain voting rights?

• When they request it in writing

• When the company is liquidated

• When they hold more than 50% of shares

• When dividends are unpaid for two or more years

What is the maximum percentage of sweat equity shares a company can issue in one financial year?

• 10%

• 20%

• 25%

• 15%

What is a Rights Issue?

• An offering of additional shares to existing shareholders

• A method to buy back shares

• An offering of shares to new investors

• A type of bonus issue