Sridha Bookmarks Ltd. a public limited company engaged in the publication of books related to labour and industrial laws is planning to raise 10…

(a) (i) As per the provision of section 25 (1) of the Companies Act, 2013, where a company allots or agrees to allot any securities of the company with a view to all or any of those securities being offered for sale to the public, any document by which the offer for sale to the public is made shall, for all purposes, be deemed to be a prospectus issued by the company. As per the provision of section 25 (2) , for the purposes of this Act, it shall, unless the contrary is proved, it shall be evidence that an allotment of, or an agreement to allot, securities was made with a view to the securities being offered for sale to the public if it is shown: (a) that an offer of the securities or of any of them for sale to the public was made within six months after the allotment or agreement to allot; or (b) that at the date when the offer was made, the whole consideration to be received by the company in respect of the securities had not been received by it. As per the provision of section 25 (4) , where a person making an offer to which this section relates is a company or a firm, it shall be sufficient if the document referred to in sub-section (1) is signed on behalf of the company or firm by two directors of the company or by not less than one-half of the partners in the firm, as the case may be. Let us examine the situation in terms of the provision of Section 25 (2) and Section 25 (4) . Here, ZFG & Associates and Bull Investments Ltd., the two merchant bankers were allotted shares by Sridha Bookmarks Ltd. On the same day, i.e. 01.04.2024. Whereas ZFG & Associates issued the offer documents on 10.10.2024, i.e. beyond the period of six months after the allotment, Bull Investments Ltd. issued the offer documents on 25.09.2024, i.e. within the stipulated period of six months after the allotment. Both the intermediaries have paid off the whole consideration to Sridha Bookmarks Ltd. till date of offer to the public. The offer document was signed by only one director of Bull Investments Ltd., whereas at least two directors were required to sign the same. Offer of sale made by the intermediary (of Sridha Bookmarks Ltd.), ZFG & Associates is not in compliance with the requirements of section 25 (2) since it issued the offer documents on 10.10.2024, i.e. beyond the period of six months after the allotment and therefore is invalid. Whereas offer of sale made by the intermediary (of Sridha Bookmarks Ltd.) Bull Investments Ltd. is also invalid due to absence of signature of at least 2 directors thus not meeting the requirements mentioned above in the section 25 (4) . (ii) Rule 8 of the Companies (Prospectus and Allotment of Securities) Rules, 2014 deals with the offer of Sale by Members. As per sub-rule (2) of the above Rule, the prospectus issued under section 28 shall disclose the name of the person or persons or entity bearing the cost of making the offer of sale along with reasons. Since the offer document issued by Kuber did not contain the name of the person or persons or entity bearing the cost of making such offer for sale, the offer document will be treated as defective and therefore the objection raised by the Board of Directors in this regard will be valid.