Section 28 of CA 2013 : Section 28: Offer Of Sale Of Shares By Certain Members Of Company

Explanation using Example

Imagine that the founders of "TechGenius Pvt. Ltd." hold a significant number of shares in the company. They decide to take the company public and sell a portion of their shares during the Initial Public Offering (IPO). They consult with the Board of Directors and agree on the terms of the share sale.

To comply with Section 28(1) of The Companies Act, 2013, they follow the prescribed procedure for offering their shares to the public. They prepare a document detailing the offer, which under Section 28(2), is treated as a prospectus. This document must meet all legal requirements for a prospectus, including full disclosure and accuracy of information to protect potential investors.

As per Section 28(3), the founders authorize "TechGenius Pvt. Ltd." to manage the sale process on their behalf and agree to cover all related expenses incurred by the company. This ensures that the offer to the public is conducted efficiently and in compliance with the law.