Section 387 of the Companies Act, 2013
Section 387 of the Companies Act, 2013 pertains to the issue of prospectus by foreign companies and the requirements that must be met when they offer securities for sale in India.
🧾 Section 387 – Dating of Prospectus and Particulars to Be Contained Therein
This section applies to a prospectus issued by a foreign company offering securities in India.
Key Provisions:
Dating of Prospectus
Every prospectus issued by a foreign company shall be dated, and that date is considered the date of publication of the prospectus.
Required Disclosures:
The prospectus must:
Contain particulars as required by Section 26 of the Companies Act, 2013 (which applies to domestic companies).
Include any additional disclosures prescribed for foreign companies under the rules.
Clearly state the country of incorporation of the company.
State the address in India where the business is to be carried on.
Language Requirement:
The prospectus must be in English, or translated into English if issued in another language.
🛑 Purpose of Section 387:
To protect investors in India by ensuring transparency and that foreign companies provide adequate information before offering securities in the Indian market.
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