## Shelf Prospectus [Section 31]

A shelf prospectus allows a company to issue securities for subscription in one or more issues over a period of time without issuing a fresh prospectus each time.

### Key rules

The shelf prospectus is filed with ROC.
It must indicate the validity period, which cannot exceed 1 year from the date of opening of the first offer.
During the validity period, no further prospectus is required for subsequent offers.

### Information Memorandum (IM)

Before each subsequent offer, the company must file an Information Memorandum in Form PAS-2 with the ROC within one month prior to the offer, containing:

Material facts relating to new charges created.
Changes in financial position between the previous offer and the succeeding offer.
Other prescribed changes.

### Important consequences

When a subsequent offer is made, the IM together with the shelf prospectus is deemed to be a prospectus.
If applications with advance money were received before changes were notified, the company must:
Intimate the changes to the applicants.
If applicants desire to withdraw, refund their money within 15 days.

Worked example

### Example 1

Q. Karan Ltd. files a shelf prospectus with ROC to raise ₹5,000 crore through multiple debenture issues over 1 year. For each issue, it files a separate Information Memorandum before the offer. Is this in order?

A. Yes. Section 31 permits this. The validity (≤1 year from the first offer) is satisfied. The IM in Form PAS-2 must be filed within one month prior to each subsequent offer, disclosing new charges, financial-position changes and other prescribed changes. The IM read with the shelf prospectus is deemed to be the prospectus for that offer.

⚠️ Common exam mistakes

Counting the 1-year validity from the date the shelf prospectus is filed instead of from the opening of the first offer.
Forgetting Form PAS-2 for the Information Memorandum.
Refunding withdrawal applicants outside the 15-day limit.

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

Any class or classes of companies, as the Securities and Exchange Board may provide by regulations in this behalf, may file a shelf prospectus with the Registrar at the stage of the first offer of securities included therein which shall indicate a period not exceeding one year as the period of validity of such prospectus...

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