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Section 27 of the Companies Act 2013: Variation in Terms of Contract or Objects in Prospectus

SECTION-27 (Variation in Terms of Contract or Objects in Prospectus) under PART-I (Public Offer) of CHAPTER-III (Prospectus and Allotment of Securities) of the Companies Act, 2013

(1) A company shall not, at any time, vary the terms of a contract referred to in the prospectus or objects for which the prospectus was issued, except subject to the approval of, or except subject to an authority given by the company in general meeting by way of special resolution:

Provided that the details, as may be prescribed, of the notice in respect of such resolution to shareholders, shall also be published in the newspapers (one in English and one in vernacular language) in the city where the registered office of the company is situated indicating clearly the justification for such variation:

Provided further that such company shall not use any amount raised by it through prospectus for buying, trading or otherwise dealing in equity shares of any other listed company.

(2) The dissenting shareholders being those shareholders who have not agreed to the proposal to vary the terms of contracts or objects referred to in the prospectus, shall be given an exit offer by promoters or controlling shareholders at such exit price, and in such manner and conditions as may be specified by the Securities and Exchange Board by making regulations in this behalf.





Extra Notes for Readers

(1) The Companies Act, 2013 received the assent of the President on the 29th August, 2013 (Published in the Gazette of India, Extraordinary, Part II - Section 1 by Ministry of Law and Justice, Legislative Department on 30th August, 2013) - link

(2) Section 27 of the Companies Act 2013 was notified by MCA Notification S.O. 902(E) dated 26th March 2014 (w.e.f. 1st April 2014) - link

(3) Refer the following rules of the Companies (Prospectus and Allotment of Securities) Rules, 2014 - link :


  • Rule 7 - Variation in terms of contracts referred to in the prospectus or objects for which prospectus was issued






This page was last updated on 20th November 2016.

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