Statement in Lieu of Prospectus

The Statement in Lieu of Prospectus is a document outlined under Section 70 of the Companies Act, 2013. It is issued by public companies under certain circumstances and provides crucial information on the company's securities, functioning as an alternative to the traditional prospectus.

Purpose

A Statement in Lieu of Prospectus is typically utilized when a full prospectus is not necessary or practical. This could be when a company, already listed on the stock market, intends to offer additional securities to the public. It offers a streamlined approach, foregoing the extensive details usually found in a full prospectus and does not require the approval of securities commissions.

Conditions for Issuance

This document is delivered to the Registrar for registration at least three days before the first allotment of shares or debentures, particularly:

• When a company opts not to issue a prospectus.
• When a company has issued a prospectus but has not proceeded with the allotment of any of the shares offered to the public.

Contents

The Statement in Lieu of Prospectus includes essential information such as:

1. Company Name: The legal name of the company.
2. Capital Structure: Details on nominal share capital, including the number of shares and their par value.
3. Business Description: An overview of the company's business operations.
4. Management Details: Names, addresses, descriptions, and occupations of the proposed or appointed directors, chief executive, managing agent, and secretary.
5. Management Provisions: Information regarding the appointment, remuneration, and voting rights of the officers of the company.
6. Securities Information: The number and amount of shares and debentures that have been agreed upon for issue.
7. Vendor Details: Names, occupations, and addresses of vendors to whom the company has paid or proposes to pay for property purchases, including the amount payable in cash, shares, or debentures.

Differences Between Prospectus and Statement in Lieu of Prospectus

Basis of Difference	Prospectus	Statement in Lieu of Prospectus (SILOP)
Filing Requirement	Filed by a public listed company.	Filed by a public unlisted company.
Legal Definition	Defined under Sec. 2 (29) of the Companies Act.	Not specifically defined in the Companies Act.
Submission	Submitted to the registrar, SEBI, and shareholders.	Submitted only to the registrar.
Nature of Document	An advertisement inviting subscription from the public.	Not an invitation for subscription; not an advertisement.
Approval	Requires approval from the commission.	No such approval required.
Form	No prescribed form in the Ordinance.	Must be filed on a prescribed form.
Objective	Provides detailed information about the company's securities.	Used in specific situations where a prospectus is not applicable.
Issue	Issued when a company is going public or offering new securities.	Issued by a company that is already trading in the market.
Distribution	Distributed widely to potential investors.	Not distributed widely.
Timing	Prepared at or before the offering of securities.	Can be prepared or filed at any time as required.