Under Section 23 Companies Act 2013, a PUBLIC company may issue securities by:
Arights issue alone, with no other modes being permitted by the Companies Act 2013
Bpublic offer only — no private placement is ever permitted by a public company under the Act
Cprivate placement only — no public offer is permitted by any public company under the Act
Dpublic offer, private placement, or rights issue / bonus issue, in such manner as may be prescribed
Answer & Solution
Correct answer: D. public offer, private placement, or rights issue / bonus issue, in such manner as may be prescribed
1. Section 23(1) Companies Act 2013: a public company may issue securities by — (a) to the public through prospectus (PUBLIC OFFER); (b) through PRIVATE PLACEMENT (Section 42); (c) through RIGHTS issue or BONUS issue (Sections 62 and 63 respectively).
2. Section 23(2): a private company may issue securities only by (a) rights issue / bonus issue; or (b) private placement.
3. The provision delineates the universe of capital-raising modes under the 2013 Act.
4. Hence option A is correct.
_Source: Companies Act 2013 (Act 18 of 2013), Govt. of India MCA — Companies Act 2013, Section 23(1)_
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