The Ministry of Corporate Affairs has issued a notification dated October 16, 2020 notifying the Companies (Prospectus and Allotment of Securities) Amendment Rules, 2020 (“PAS Rules”), prescribed under the Companies Act, 2013.
Pursuant to the amendment in Rule 14(1) of the PAS Rules, fourth proviso has been inserted, which specifies that in the event where a company offers or invites qualified institutional buyers (“QIBs”) to subscribe to its securities through private placement, it would be sufficient if the company passes a special resolution only once in a year for all the allotments to be made to the QIBs during the year.
Earlier, the requirement was to obtain approval from the shareholders of the company by way of a special resolution for each of the offers or invitations.
Please find attached a copy of the notification.
This update has been contributed by Arka Majumdar (Partner) and Juhi Wadhwani (Associate).
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