Section 31 - Shelf Prospectus

# Section 31 — Shelf Prospectus

## Why It Exists

If a company makes multiple issues of securities frequently in the same year, filing a fresh prospectus every time is costly and cumbersome. The shelf prospectus solves this — file once, issue multiple times.

## Definition

A "shelf prospectus" means a prospectus in respect of which the securities or class of securities included therein are issued for subscription in one or more issues over a certain period without the issue of a further prospectus.

Literal meaning: A prospectus that has a "shelf life" — kept on the shelf, used multiple times.

## Key Tool: Information Memorandum

During the shelf life, a company supplements the shelf prospectus by an "Information Memorandum" containing key updates/changes between issues — no fresh prospectus needed.

## Provisions of Section 31

### 1. Filing with Registrar

• Eligibility: Any class or classes of companies as SEBI provides by regulations.
• Such company may file a shelf prospectus with the Registrar.

### 2. Validity Period

Filing stages:

• (i) At first offer: Indicate validity period — not exceeding one year from the date of opening of the first offer.
• (ii) Second/subsequent offers within validity period: No further prospectus is required.

### 3. Information Memorandum — Mandatory Filing

Before each subsequent offer, file an Information Memorandum containing all material facts on:

• (i) New charges created
• (ii) Changes in financial position between the previous offer and the succeeding offer
• (iii) Other prescribed changes

File within prescribed time prior to the issue of a second or subsequent offer.

### 4. Intimation to Existing Applicants

If the company has received applications + advance payments before such change:

• Company must intimate the changes to applicants.
• If applicants wish to withdraw, company must refund all monies received as subscription within 15 days.

### 5. Deemed Prospectus

When Information Memorandum is filed with the shelf prospectus, together they shall be deemed to be a prospectus.

## Quick Reference