Prospectus Issued by Foreign Company [Sec 387 & 389]
# Prospectus of Foreign Company — Sections 387 to 389
## Important Distinction
Sections 387 to 391 apply to a company incorporated outside India that issues a prospectus or makes an offer to Indian investors — whether or not it has a place of business in India.
In contrast, Sections 380 to 386 apply only to foreign companies (companies that DO have a place of business in India).
## Section 387 — Dating of Prospectus and Particulars to be Contained
No person shall issue, circulate or distribute in India any prospectus offering for subscription securities of a company incorporated outside India (whether or not it has a place of business in India) unless the prospectus:
### Is Dated and Contains:
#
Required Particular
1
Instrument constituting/defining the constitution (charter, statutes, MOA/AOA) — and where copies can be inspected
2
Date and country of incorporation
3
Whether the company has established a place of business in India and, if so, the address of its principal office in India
4
Statement of matters specified in Section 26 (general prospectus content)
### Restriction on Old Prospectuses
No prospectus shall be issued more than 2 years after the date on which the company is entitled to commence business.
## Application Forms for Securities
A foreign company shall not issue an application form for securities unless the form is accompanied by a prospectus complying with Sec 387.
### Exception
The restriction does not apply to issue of an application form to a person for entering into an underwriting agreement.
Worked example
### Example 1
Q. A Mauritius company, incorporated 5 years ago and entitled to commence business since incorporation, wishes to issue a fresh prospectus in India. Is this permissible?
A. No. Under Sec 387, no prospectus can be issued more than 2 years after the date on which the company became entitled to commence business.
### Example 2
Q. A Singapore company sends an application form for shares to an Indian merchant banker for entering into an underwriting agreement, without a prospectus. Valid?
A. Yes. This falls within the express exception — application forms issued for entering into an underwriting agreement do not require a prospectus.
⚠️ Common exam mistakes
Believing Sec 387 applies only to foreign companies under Sec 2(42) — it applies to ANY company incorporated outside India that solicits Indian investors.
Forgetting the 2-year freshness limit on prospectus issuance.
Missing the underwriting agreement exception to the application form rule.
Omitting the address of the principal Indian office (when one exists) from the prospectus particulars.
Bare-Act text Sections 387 to 389 · Companies Act, 2013 · click to expand
Section 387: No person shall issue, circulate or distribute in India any prospectus offering for subscription in securities of a company incorporated or to be incorporated outside India, whether the company has or has not established, or when formed will or will not establish, a place of business in India, unless the prospectus is dated and signed, and — (a) contains particulars with respect to the following matters, namely: — (i) the instrument constituting or defining the constitution of the company; (ii) the enactments or provisions by or under which the incorporation of the company was effected; (iii) address in India where the said instrument, enactments or provisions, or copies thereof, and if the same are not in the English language, a certified translation thereof in the English language can be inspected; (iv) the date on which and the country in which the company would be or was incorporated; and (v) whether the company has established a place of business in India and, if so, the address of its principal office in India; and (b) states the matters specified under section 26.