Chapter- 3

Prospectus & Share Capital

Share Capital
The provisions related to raising of capital such as issue of prospectus,
allotment of shares etc. and other matters incidental thereto are contained in
Chapter III of the Companies Act, 2013, which is divided into two parts:

Companies Act, 2013

Chapter III- Part 1 Prospectus & Allotment of Securities Section 23- 41

Chapter III- Part 2 Private Placement Section 42

Chapter IV Share Capital & Debentures Section 43-72

Advantage of a • Raising Capital
Company • Based on Scale of operations

Raising of • Public
Capital • Private

Capital • Inflow of funds to issuer- requires

acquisition advertisement

Relevant legal
provisions • To protect investors
 Definition of a Company

Lord Justice Lindley

“an association of many persons who contribute money or money’s
worth to a common stock and employ it in some trade or business
and who share the profit and loss arising therefrom. The common
stock so contributed is denoted in money and is the capital of the
company. The persons who contributed in it or form it, or to whom
it belongs, are members. The proportion of capital to which each
member is entitled is “share”. The shares are always transferable
although the right to transfer them may be restricted.”
 Introduction

• The capital of a company is divided into a number of units of a fixed

amount.

• These units are known as shares. Share is a share in the share capital of the
company.

• Share capital refers to the funds that a company raises in exchange for
issuing an ownership interest in the company in the form of shares.
Classification of Share Capital
 Nominal, Subscribed
Authorised or Issued Capital
Registered Capital Capital

Paid-up Share
Called-up Capital
Capital
 Classification of Share Capital
Nominal, Authorised Such capital as is authorised by the memorandum of a company to be the
or Registered Capital maximum amount of share capital of the company.

Issued Capital Such capital as the company issues from time to time for subscription. It is
that part of the authorised or nominal capital which the company issues for
the time being for public subscription and allotment.

Subscribed Capital Such part of the capital which is for the time being subscribed by the
members of a company. It is that portion of the issued capital at face value
which has been subscribed for or taken up by the subscribers of shares in
the company. It is clear that the entire issued capital may or may not be
subscribed.
 Classification of Share Capital

Called-up Capital Such part of the capital, which has been called for payment. It is that
portion of the subscribed capital which has been called up or demanded on
the shares by the company.

Paid-up Share It is that part of the subscribed capital which has been actually paid up by
Capital the shareholders.
Share & Types of Shares
 Nature of a Share
(a) A share is a right to a specified amount of the share capital of a company, carrying with it
certain rights and liabilities while the company is a going concern and in its winding up.

(b) A share is a right to participate in the profits made by a company, while it is a going concern.

(c) Section 44 of the Companies Act, 2013 provides that a share or debentures or other interest of
any member in a company is a movable property transferable in the manner provided by the
articles of the company.

(d) A share is regarded as goods. According to the Sale of Goods Act, 1930, “Goods” means any

kind of movable property other than actionable claim and money, and includes stock and shares.
 Types of Shares
Section 43 of Companies Act 2013 defines:

The share capital of a company limited by shares shall be of two kinds, namely:—

(a) equity share capital—

(i) with voting rights; or

(ii) with differential rights as to dividend, voting or otherwise in accordance with such
rules as may be prescribed; and

(b) preference share capital

Preference Share Capital
Preference share capital means a part of share capital with a preferential right
with respect to:

• Payment of dividends, it must carry a preferential right to fixed amount or

amount calculated at a fixed rate and
• As regards the capital, in the event of a winding up or other arrangement to
repayment of capital, there must be a preferential right to be repaid the
amount of the capital paid up on such share.
 Payment of
Preferential Dividend
Right Repayment
of Capital
 Types of Preference Share Capital

On the basis of Dividend Payout

Cumulative • The dividends are accumulated and paid before anything paid to equity
Preference Shares shares.

• It requires that any unpaid dividends must be paid to preferred

shareholders before any dividends can be paid to equity shareholders.

Non- Cumulative • Dividend does not get accumulated.

Preference Shares
• Dividend is only payable from each year’s net profit.

• If a company undergoes a loss in that year, then the outstanding

payment of dividend cannot be claimed in subsequent years like in
the case of cumulative preference shares.
 Types of Preference Share Capital

On the basis of Dividend Payout

Participatory • PPS holders have an additional benefit of participating in surplus

Preference Shares profits of the company in addition to preferential dividend

Non- Participatory • PPS holders are entitiled to only a fixed rate of dividend
Preference Shares
 Types of Preference Share Capital

On the basis of Repayment of Capital

Redeemable • The paying back of capital is called redemption.

Preference Shares • PS which can be redeemed after a fixed period is redemable PS.
• As per section 55, PS shall be redemeed within a period not exceeding
20 years.
• In case of Infrastructure company, PS shall be redemeed within a
period not exceeding 30 years.

Irredeemable • PS which do not have any maturity date/ fixed period of redemption.
Preference Shares • As per section 55, no company can issue irredeemable Preference
Shares
 Types of Preference Share Capital

On the basis of Convertibility

Convertible • PS holder has the option to convert into equity share of the company.
Preference Shares

Non- Convertible • Non-convertible preference shares do not carry the right of conversion
Preference Shares into the company’s common shares.
RIGHTS AND VARIATION OF
RIGHTS

SECTION 47 & 48
Section 47: Voting Rights

Voting right of
Voting right of
member holding
member holding
preference share
equity share capital
capital

Proportion of voting
rights
 Meetings

BM GM CM

AGM PS

EGM DEB
Voting right of member holding equity share capital
1. Every member of a company limited by shares and holding equity share
capital therein, shall have a right to vote on every resolution placed before
the company

2. His voting right on a poll shall be in proportion to his share in the paid-up
equity share capital of the company

3. one share one vote

Voting right of member holding preference share capital
Every member of a company limited by shares who is holding any preference share
capital shall, in respect of such capital, have:

1. a right to vote only on resolutions placed before the company which directly affect
the rights attached to his preference shares, and

2. any resolution for the winding up of the company, or

3. for the repayment or reduction of its preference share capital

Voting right on a poll shall be in proportion to his share in the paid-up preference share
capital of the company one share one vote
Proportion of voting rights
1. The proportion of the voting rights of equity shareholders to the voting
rights of the preference shareholders shall be in the same proportion as
the paid-up capital in respect of the equity shares bears to the paid-up
capital in respect of the preference shares

2. Non- payment of the dividend to preference shares for a period of 2 years

or more, there such class of preference shareholders shall have a right to
vote on all the resolutions placed before the company
Section 48
Section 48 - Variations of shareholders’ rights
1. Variation in rights of shareholders with consent- SR:

(a) if provision with respect to such variation is contained in the articles of

the company; or

(b) in the absence of any such provision in the articles, if such variation is not
prohibited by the terms of issue of the shares of that class:
Section 48 - Variations of shareholders’ rights
2. No consent for variation:

Where the holders of not less than 10% of the issued shares of a class did not
consent to such variation or vote in favour of the special resolution for the
variation, they may apply to the Tribunal to have the variation cancelled

3. Binding decision of Tribunal

Equity shares with
Differential rights
Equity shares with differential rights (DVR)

• An Equity Shares with differential rights is an ordinary equity shares but it

provides fewer voting rights to its shareholder.

• It another class of shares i.e. Equity shares with differential rights.

• The differential rights are in respect of voting power and dividend.

Equity shares with differential rights

• So generally equity shares with less voting rights carry higher rate of
dividend but whereas the equity shares with higher voting rights carries
with lesser rate of dividend.

• Equity shares with higher voting rights are generally given to promoters,
key managerial persons, Managing directors
Conditions to issue Equity shares with differential rights
Section 43(2) of the Companies Act 2013 read with Companies (Share
Capital & Debentures Rules) 2013:

1. Authorisation in AoA

2. Authorisation by Members- Ord Rsl

3. Listed company- approval through Postal Ballot

Conditions to issue Equity shares with differential rights
4. The shares with differential rights shall not exceed 74% of the total post-
issue paid up equity share capital including equity shares with differential
rights issued at any point of time.

5. Has not defaulted in filing financial statements and annual returns for
three financial years

6. Has no d e f a u l t in the p a y m e n t of a d e c l a r e d d i v i d e n d to its

shareholders
Conditions to issue Equity shares with differential rights
7. Has not defaulted in repayment of its matured

• Deposits or
• Redemption of its preference shares or
• Debentures that have become due for redemption
• Term loan from a public financial institution

8. Has not defaulted in payment of interest on such deposits/ debentures/

loans
Conditions to issue Equity shares with differential rights
9. The company has not been penalized by Court or Tribunal during the last
3years of any offence under:

• Reserve Bank of India Act, 1934,

• Securities and Exchange Board of India Act, 1992,
• Securities Contracts Regulation Act, 1956,
• Foreign Exchange Management Act, 1999 or
• Any other Special Act
Sweat Equity Shares
 Sweat Equity Shares - Section 2(88)
Sweat equity shares mean such equity shares issued by a company to its
directors or employees at a discount or consideration, other than cash for
providing their know-how or making available rights in the nature of
intellectual property rights or value additions, by whatever name called.
Employee
‘‘Employee’’ means-

(a) a permanent employee of the company who has been working in India or
outside India; or

(b) a director of the company, whether a whole- time director or not; or

(c) an employee or a director as defined in sub-clauses (a) or (b) above of a

subsidiary, in India or outside India, or of a holding company of the company
Value Additions
Actual or anticipated economic benefits derived or to be derived by
the company from an expert or a professional for providing know-
how or making available rights in the nature of intellectual property
rights, by such person to whom sweat equity is being issued for
which the consideration is not paid or included in the normal
remuneration payable under the contract of employment, in the case
of an employee
 Conditions for Issue of Sweat Equity Shares- Section 54(1)

Types of shares Class of shares already issued

Authorisation Special Resolution

Details to be (a)number of shares;

clearly specified- (b)current market price;
ES (c)consideration, if any; and
(d)class or classes of directors or employees to whom
such equity shares are to be issued.
 Rules for Issue of Sweat Equity Shares- Section 54(1)

Limit on issue • company shall not issue sweat equity shares for more than
15% of the existing paid up equity share capital in a year
OR
• shares of the issue value of Rs. 5 Crores, whichever is higher.
• The issuance of sweat equity shares in the company shall not
exceed
25%, of the paid up equity capital of the company at any time.

Exemption for • The limit for Startup companies is 50 % of paid up capital

a Start up • Upto 10 years from the date of its incorporation or registration.
 Conditions for Issue of Sweat Equity Shares- Section 54(1)

Listed Company Comply with SEBI regulations

Unlisted Company Companies (Share Capital and Debentures) Rules, 2014.

Validity of SR 12 Months from date of passing SR

Lock in period • 3 years from the date of allotment

• Stamped in bold on share certificate

Register • Register of Sweat Equity Shares in Form No. SH.3

• Kept at the Registered office of the company
• authenticated by th e Company Secretary of the company
• or by any other person authorized by the Board for the purpose.
Further Issue of Share Capital

Section 62
 Further Issue of
Share Capital

Holders of Equity
Employees Any Persons
Shares

u/s 62(1)(a) u/s 62(1)(b) u/s 62(1)(c)

Rights Issue ESOP Preferential Basis
 Rights Issue
• A rights issue is an invitation to existing shareholders to purchase
additional new shares in the company.
• This type of issue gives existing shareholders rights.
• With the rights, the shareholder can purchase new shares at a
discount to the market price.
• The company is giving shareholders a chance to increase their
participation in the equity.
• A rights issue involves pre-emptive subscription rights to buy
additional securities in a company offered to the company’s
existing security holders.
 Pre-emptive subscription rights
• Preemptive rights are a contractual clause giving a shareholder the right to
buy additional shares in any future issue of the company's common stock
before the shares are available to the general public.

• Shareholders who have such a clause are generally early investors or

majority owners who want to maintain the size of their stake in the
company when and if additional shares are offered.
 Why Would A Company Issue A Rights Offering?
1. To raise additional capital
 Expansion
 Diversification

2. To meet its current financial obligations.

3. Unable to borrow more Loan

 CONDITIONS FOR
FURTHER ISSUE OF
SHARES TO EQUITY
HOLDERS
 CONDITIONS FOR FURTHER ISSUE OF SHARES TO EQUITY
HOLDERS RIGHTS ISSUE [u/s 62(1)(a)]

1. Offer • By Notice
• Specifying the number of shares offered
2. Time Limit • Minimum- 15 days
• Maximum- 30 days
From the date of the offer within which the offer, if not accepted,
shall be deemed to have been declined.
The offer shall be deemed to include right of renunciation,unless
the articles of the company otherwise provide
1. accept- part /full
2. reject
3. renounce
4. deemed rejection- silent
 CONDITIONS FOR FURTHER ISSUE OF SHARES TO EQUITY
HOLDERS RIGHTS ISSUE [u/s 62(1)(a)]
3a A Statement in • If the offer is rejected by the equity shareholders
the Notice • after the expiry of the time specified in the notice
aforesaid, or
• on receipt of earlier intimation from the person to whom
such notice is given that he declines to accept the shares
offered,
• the Board of Directors may dispose of them in such manner
which is not dis-advantageous to the shareholders and
the company.
3b A Statement in • right to renounce the offer
the Notice • in whole or in part,
• in favour of some other persons.
 CONDITIONS FOR FURTHER ISSUE OF SHARES TO EQUITY
HOLDERS RIGHTS ISSUE [u/s 62(1)(a)]

4. Dispatch of • registered post or

Notice • speed post or
• through electronic mode or
• courier
• or any other mode having proof of delivery to all the existing
shareholders

5. Time Limit • At least 3 days

for Dispatch • Before the opening of the issue.
of Notice
 CONDITIONS FOR FURTHER ISSUE OF SHARES TO EQUITY
HOLDERS RIGHTS ISSUE [u/s 62(1)(a)]

6. Exemption to • Time limit for Acceptance of Offer 15-30

Private Co. • Time Limit for Dispatch of Notice- 3

a) Requirement • Periods lesser than those specified

• 90% of the members approve

b) Mode of • In writing
Consent • Post or
• Through electronic mode
 Further Issue of
Share Capital

Holders of Equity
Employees Any Persons
Shares

u/s 62(1)(a) u/s 62(1)(b) u/s 62(1)(c)

Rights Issue ESOP Preferential Basis
Employee Stock Option
 ESOP- 2(37)

"employees' stock option" means the option given to the directors,

officers or employees of a company or of its holding company or
subsidiary company or companies, if any, which gives such
directors, officers or employees, the benefit or right to purchase,
or to subscribe for, the shares of the company at a future date at a
pre-determined price;
 Rules & Regualtions for ESOP

• Securities and Exchange Board of India

Listed Company Employee Stock Option Scheme Guidelines

Unlisted Public • Special Resolution

Company

• Ordinary Resolution
Private Company • (Not defaulted in filing its financial statements or
Annual Return)
 Details in Explanatory Statement for ESOP
1. Total number of stock options to be granted
2. Identification of classes of employees entitled to participate in ESOP

3. The appraisal process for determining the eligibility of employees

4. The requirements of vesting and period of Vesting

(Vesting is a legal term that means to give or earn a right to a present or future payment, asset, or
benefit)
5. The maximum period within which the options shall be vested
Difference between Sweat
Equity Shares and ESOP
 BASIS FOR Sweat Equity ESOP
COMPARISON

Meaning 54 RULE 8 OF THE 2(37), Rule 12 of the Companies

COMPANIES (SHARE AND (Share Capital and Debentures)
DEBENTURES) RULES, Rules, 2014
2014
Purpose/Motive Quid Pro Quo Incentive, Reduce Labour Turnover

Consideration Monetary or non- monetaryVA, Money only

IPR

Price of the Share At Discount At Pre-dertermined Price

Limit 15%/5 cr/25% No Limit

 BASIS FOR Sweat Equity ESOP
COMPARISON

Eligibility Valuation of IPR/VA Performance Appraisal

Further Issue Not a FI It is a FI

Employees Only Directors/ Top Level ALL

Vesting Immd Future

Option Not an option Option

Type of Resolution SR SR, OR-Pvt (No Default in FS & AR)
 Preferential Issue
‘Preferential Offer’ means an issue of shares or other securities, by
a company to any select person or group of persons on a
preferential basis and does not include shares or other securities
offered through a public issue, rights issue, employee stock option
scheme, employee stock purchase scheme or an issue of sweat
equity shares or bonus shares.
Rules & Regualtions for Preferential Issue

Listed • SEBI

Company

Unlisted • Companies Act, 2013

• Rule 13 of Companies (Share
Company Capital & Debentures) Rules 2014
 Requirements for Preferential Issue

Valuation report
Special
of a Registered
Resolution
Valuer
 Details in Explanatory Statement for
Preferential Issue
1. The objects of the issue
2. The total number of shares or other securities to be issued

3. Basis on which the price has been arrived at along with report of the
registered valuer
4. Relevant date with reference to which the price has been arrived at
5. The class or classes of persons to whom the allotment is proposed to
be made
Issue of Bonus Shares

Section 63
 Issue of Bonus Shares
• Isuue of Bonus Shares is an offer of free additional shares to existing
shareholders.

• Members do not have to pay any amount for such shares. They are given
free.

• Bonus shares are issued according to each shareholder’s stake in the

company.

• Bonus issues do not dilute shareholders’ equity, because they are issued to
existing shareholders in a constant ratio that keeps the relative equity of
each shareholder the same as before the issue.
 Conditions for Issue of Bonus Shares
1. Authorised by its Articles+ MoA
2. Authorised by SH in GM

3. Not defaulted in payment of interest or principal in respect of fixed deposits or

debt securities
4. Not defaulted in respect of the payment of statutory dues of the employees,
such as, contribution to provident fund, gratuity and bonus
5. The partly paid-up shares, if any outstanding on the date of allotment, are made
fully paid-up

6. The bonus shares shall not be issued in lieu of dividend

BUY BACK OF SECURITIES

Section 68
BUY BACK OF SECURITIES
BUY BACK OF SECURITIES
BUY BACK OF SECURITIES
BUY BACK OF SECURITIES
BUY BACK OF SECURITIES
Shares & Stock
 Shares & Stock
• A ‘Share‘ is the smallest unit into which the company’s capital is divided,
representing the ownership of the shareholders in the company.

• A ‘Stock‘ on the other hand is a collection of shares of a member that are

fully paid up.

• When shares are transformed into stock, the shareholder becomes a

stockholder, who possess same right with respect to the dividend, as a
shareholder possess.
Power of Limited Company
to Alter its Share Capital

Section 61
 Section 61(c)- Power of Limited Company to Alter its
Share Capital
As per Section 61 (1),
A limited company having a share capital may, if so authorised by its articles,
alter its memorandum in its general meeting to-
As per Section 61 (c) convert all or any of its fully paid-up shares into stock,
and reconvert that stock into fully paid-up shares of any denomination;
 BASIS FOR SHARE STOCK
COMPARISON
Meaning The capital of a company, is The conversion of the fully paid
divided into small units, which up shares of a member into a
are commonly known as single fund is known as stock.
shares.
Is it possible for a Yes No
company to make
original issue?
Paid up value Shares can be either partly or Stock can only be fully paid up
fully paid up.
Fractional transfer Not possible Possible
Requirements for Conversion

Authorisation Ordinary
in AoA Resolution

Intimation to
RoC
Share Certificate

Section 46
Share Certificate- Section 46
(1) A certificate, 1[issued under the common seal, if any, of the company or
signed by two directors or by a director and the Company Secretary,
wherever the company has appointed a Company Secretary], specifying the
shares held by any person, shall be prima facie evidence of the title of the
person to such shares.
Share Certificate- Section 46
2) A duplicate certificate of shares may be issued, if such certificate —

(a) is proved to have been lost or destroyed; or

(b) has been defaced, mutilated or torn and is surrendered to the company.
Share Certificate- Section 46
(3) The particulars to be entered in the register of members and other matters
shall be such as may be prescribed.

(4) Where a share is held in depository form, the record of the depository is
the prima facie evidence of the interest of the beneficial owner.

(5) If a company with intent to defraud issues a duplicate certificate of shares,

the company shall be punishable with fine which shall not be less than five
times the face value of the shares involved in the issue of the duplicate
certificate but which may extend to ten times the face value of such shares or
rupees ten crores whichever is higher and every officer of the company who
is in default shall be liable for action under Section 447.
 Certificate of Shares- Section 46

1. Purpose prima facie evidence of the title

2. Duplicate Certificate lost/ destroyed/ defaced/ mutilated /torn and is surrendered

3. Entry of Details Register of Members

4. Demat Form Record of Depository- prima facie evidence

5. Penalty- Defraud  Min- 5 times value of shares

 Max- 10 times value of shares
 or
 Max- 10 Crores (whichever is higher)
 Every Officer in Default- Section 447
Prospectus
Advantage of a Company • Raising Capital
• Based on Scale of operations

• Public
Raising of Capital • Private

Capital from Public • Public Offer

Capital from Private • Private Placement

Capital acquisition • Inflow of funds to issuer- requires advertisement

Relevant legal provisions

• To protect investors
The provisions related to raising of capital such as issue of prospectus,
allotment of shares etc. and other matters incidental thereto are contained in
Chapter III of the Companies Act, 2013, which is divided into two parts:

Companies Act, 2013

Chapter III- Part 1 Prospectus & Allotment of Securities Section 23- 41

Chapter III- Part 2 Private Placement Section 42

Definition of Prospectus

Prospectus means any document described or issued as a prospectus and

includes a red herring prospectus referred to in section 32 or shelf prospectus
referred to in section 31 or any notice, circular, advertisement or other
document inviting offers from the public for the subscription or purchase of
any securities of body corporate.
Definition of Prospectus- Section 2(70)

Red herring Shelf

Prospectus Prospectus

Document Notice, Circular,

inviting offers Advertisement
Types of Prospectus
 Types of Prospectus

Red herring Shelf

Prospectus Prospectus

Abridged Deemed
Pospectus Prospectus
 Shelf Prospectus
• A prospectus in respect of which the securities or class of securities
included therein are issued for subscription in one or more issues over a
certain period without the issue of a further prospectus.

• Shelf Prospectus is a single prospectus for multiple public issues.

• Issuer is permitted to offer and sell securities to the public without a

separate prospectus for each act of offering for a certain period.
Shelf Prospectus
 Shelf Prospectus

Shelf
1st Offer
Prospectus
Filing with RoC
Information Subsequent
Memorandum Offers
Information Memorandum
 Information Memorandum
An Information Memorandum is required to be filed by a company filing a
shelf prospectus which shall contain all material facts relating to
 new charges created,
changes in the financial position of the company as have occurred between
the first offer of securities or the previous offer of securities and the
succeeding offer of securities and
 such other changes as may be prescribed
 Validity of Shelf Prospectus
• The validity period is 1 year

• The validity period shall commence from the date of opening of the first
offer of securities under that prospectus, and in respect of a second or
subsequent offer of such securities issued during the period of validity of
that prospectus, no further prospectus is required.
Red-Herring Prospectus
 Red-Herring Prospectus
• Red herring Prospectus means a prospectus which does not include
complete particulars of the quantum or price of the securities included
therein.
• It contains most of the information pertaining to the company’s operations
and prospects, but does not include key details of the issue such as its price
and the number of shares offered.
 Red-Herring Prospectus

Quantum
Not
Included
Price
Abridged Prospectus
 Abridged Prospectus
• A memorandum containing such salient features of a prospectus as may be
specified by the SEBI by making regulations in this behalf.
• No form of application for the purchase of any of the securities of a
company shall be issued unless such form is accompanied by an abridged
prospectus.
 Draft Prospectus
For Scrutiny

SEBI

Final Prospectus

RoC

Final Prospectus

Public

Abridged Prospectus+ Application

Deemed Prospectus
(Offer for Sale)
 Deemed Prospectus- Offer for Sale

Under section 25 of the Act where a company allots or agrees to allot any
securities of the company with a view to all or any of those securities being
offered for sale to the public, any document by which the offer for sale to the
public is made shall, for all purposes, be deemed to be a prospectus issued by
the company.
Issuing Company X Ltd- Principal

Allots Securities

Issuing House- doc issued- DP-

Interm/agent
Issues to Public

Public

On the basis of Prospectus of

Company
 Deemed Prospectus- Offer for Sale
• The document “Offer for sale” is an invitation to the general public to
purchase the shares of a company through an intermediary, such as an
issuing house or a merchant bank.
• A company may allot or agree to allot any shares or debentures to an “Issue
house” without there being any intention on the part of the company to
make shares or debentures available directly to the public through issue of
prospectus.
• The issue house in turn makes an “Offer for sale” to the public.
Misstatement in Prospectus
 What is a • Misleading Information
• False Information
Mis-statement? • Suppression / Omission of Information

What • Relevant or Material Facts

Information?
Material • Means information that a reasonable investor would consider

Information? important in making an investment decision

 Consequences of
Misstatement in Prospectus
 Section 34 Criminal Liability
Consequences of
Misstatement in
Prospectus
Section 35 Civil Liability