Section 33 of CA 2013 : Section 33: Issue Of Application Forms For Securities

Explanation using Example

Imagine a start-up company, "Tech Innovations Ltd.", planning to raise funds by issuing new shares. Before they can release any application forms for these shares, according to Section 33(1) of the Companies Act, 2013, they must ensure that each form is accompanied by an abridged prospectus. This prospectus provides potential investors with key information about the company's financials, risks, and the securities being offered.

However, if "Tech Innovations Ltd." is approaching only a select group of investors to underwrite the share issuance, as per the exception in Section 33(1)(a), they would not need to attach an abridged prospectus to their application forms. Similarly, if the shares are being offered privately to a group of investors and not to the public, as per Section 33(1)(b), the requirement to include an abridged prospectus is waived.

Moreover, if an interested investor requests a full prospectus before the subscription closes, "Tech Innovations Ltd." must provide one, as stated in Section 33(2).

If the company fails to adhere to these requirements, for instance, by distributing application forms without the abridged prospectus to the public, they would face a penalty of fifty thousand rupees for each such instance of non-compliance, as per Section 33(3).