# Shelf Prospectus (Section 31)

## Why a Shelf Prospectus?

If a company makes multiple issues of securities frequently in the same year, filing a fresh prospectus every time is burdensome. A shelf prospectus allows multiple issues within a fixed period, supplemented only by an information memorandum that records key updates between issues.

## Definition

A shelf prospectus = a prospectus in respect of which securities (or a class of securities) included therein are issued for subscription in one or more issues over a certain period, without the need for a further prospectus.

## Key Provisions — Section 31

### 1. Who Can File

Any class or classes of companies as SEBI may provide by regulations may file a shelf prospectus with the Registrar.

### 2. Validity Period

Filed at the stage of the first offer of securities included therein.
Indicates a period not exceeding ONE YEAR as the period of validity.
Validity commences from the date of opening of the first offer of securities under that prospectus.
For a second or subsequent offer during the validity period — no further prospectus is required.

### 3. Information Memorandum (IM)

A company filing a shelf prospectus must file an information memorandum with the Registrar prior to a second/subsequent offer, containing all material facts relating to:

(i) New charges created
(ii) Changes in the financial position of the company between the first/previous offer and the succeeding offer
(iii) Such other changes as may be prescribed

### 4. Intimation to Applicants & Right to Refund

If a company has received applications for allotment along with advance payments before any such change:

The company shall intimate the changes to those applicants.
If applicants express a desire to withdraw, the company shall refund all monies within 15 days.

### 5. Deemed Prospectus

Where an information memorandum is filed each time an offer is made, the IM together with the shelf prospectus shall be deemed to be a prospectus.

## Memory Hook

"One filing, one year, many issues — IM bridges the gap, 15-day refund for change-of-mind applicants."

Worked example

### Example 1

Example 1 — Validity: A bank files a shelf prospectus on 1 March 2026, with the first offer opening on 15 March 2026. Validity: Up to 14 March 2027 (one year from opening of first offer, NOT from filing).

### Example 2

Example 2 — IM Required: Between the first issue (April) and the second issue (August), the company created a new charge on its plant and machinery worth ₹50 crore. Required: File an information memorandum with the Registrar before the August issue disclosing this new charge.

### Example 3

Example 3 — Refund: Mr. A applies for securities in July and pays advance subscription. In August, before allotment, the company files an IM showing major adverse change in financial position. Mr. A withdraws his application on 5 September. Result: The company must refund Mr. A's money by 20 September (15 days).

⚠️ Common exam mistakes

Counting validity from the date of filing instead of the date of opening of the first offer.
Believing the validity can be 'up to two years' — the cap is one year.
Skipping the IM for a second offer because 'the prospectus is still valid' — IM is mandatory for every subsequent offer when changes occur.
Confusing refund timeline — it is 15 days from the date the applicant expresses desire to withdraw, not 7 or 30.

Bare-Act text Section 31 · Companies Act, 2013 · click to expand

Section 31 — (1) Any class of companies as SEBI may by regulations provide may file a shelf prospectus with the Registrar at the stage of the first offer of securities, indicating a period not exceeding one year as the period of validity, commencing from the date of opening of the first offer. (2) A company filing a shelf prospectus shall file an information memorandum with the Registrar containing material facts on new charges, changes in financial position, and such other changes as may be prescribed, prior to a second or subsequent offer. Where applicants had paid advance subscription before such change, the company shall intimate them and refund within 15 days if withdrawal is requested. (3) The information memorandum together with the shelf prospectus shall be deemed to be a prospectus.

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