Section 389 of CA 2013 : Section 389: Registration Of Prospectus

Explanation using Example

Imagine a foreign technology company, "TechGlobal Inc.", planning to raise funds by issuing shares. The company is registered in the United States but wants to attract Indian investors. Before TechGlobal Inc. can circulate its prospectus in India, the chairperson and two directors must certify that their managing body has approved the prospectus. Following this, they must register a copy of the prospectus with the Registrar in India.

In this scenario, if TechGlobal Inc. fails to register the prospectus or doesn't state on the prospectus that a copy has been delivered for registration, they would be violating Section 389 of the Companies Act, 2013. This would prevent them from legally offering their securities to potential investors in India.