# Section 27 — Variation in Terms of Contract or Objects in Prospectus
## The Rule
A company cannot vary the terms of a contract or objects stated in the prospectus unless:
- A Special Resolution (SR) is passed at a general meeting; AND
- The SR is passed by way of postal ballot.
## Contents of the Notice for SR
The notice convening the SR must contain:
1. Original purpose or object of the issue;
2. Total money raised;
3. Money utilized for the original objects;
4. Progress on originally proposed objects (e.g., 50%, 60%);
5. Unutilized amount from the funds raised;
6. Details of the proposed variation in terms of contract or objects;
7. Justification for the variation;
8. Proposed timeframe to achieve the varied objectives;
9. Clause-wise details of original objects;
10. Risk factors of the new objects;
11. Any other information relevant to enable members to make an informed decision.
## Publicity Requirements
- The notice of SR must be published in 2 newspapers circulating in the place of the registered office:
- One in English;
- One in the vernacular (local) language.
- The notice must also be posted on the company's website.
## Prohibition on Speculation
The company cannot use the funds raised through the prospectus for:
- Buying, trading, or dealing in equity shares of any other listed company.
This prevents diversion of public funds into speculative investments.
## Exit Offer to Dissenting Shareholders
- Dissenting shareholders (those who voted against the variation) must be offered an exit option.
- The exit is offered by the promoters or controlling shareholders.
- The exit price and manner are as specified by SEBI.
## Practical Significance
Section 27 protects investors who relied on the original prospectus disclosure. If a company wants to redirect funds, it cannot do so unilaterally — investors get a vote AND a guaranteed exit.