Issue of securities by the company :

Section 23 of the Companies Act, 2013 is new section which seeks to provide the ways in which a public company or a private company may issue securities.

(1) Issue of securities by public company: According to the section, a public company may issue securities in the following manner –

(a) to public through prospectus (herein referred to as “public offer”), or

(b) through private placement; or

(c) through a rights issue or a bonus issue, and

(d) in case of a listed company or a company which intends to get its securities listed( unlisted companies), with the provisions of the Securities and Exchange Board of India Act, 1992 and the rules and regulations made there under.

Here term, “public offer” includes initial public offer (IPO) or further public offer of securities to the public by a company, or an offer for sale of securities to the public by an existing shareholder, through issue of a prospectus.

(2) Issue of securities by private company Whereas a private company may issue securities —

(a) by way of rights issue or bonus issue; or

(b) through private placement.