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    Question

    Which of the following statements is true about Red herring prospectus?

    A Issued by a company proposing to make an offer of securities Correct Answer Incorrect Answer
    B Issued to attract different investors Correct Answer Incorrect Answer
    C Issued prior to issue of a prospectus Correct Answer Incorrect Answer
    D A and B are true Correct Answer Incorrect Answer
    E A, B and C are true. Correct Answer Incorrect Answer

    Solution

    As per Section 32 of Companies Act, 2013, a company proposing to make an offer of securities may issue a red herring prospectus prior to the issue of a prospectus. It is basically a prospectus which is used in the public issue to attract different investors.   Snapshoot - Topic covered in Live class of SEBI Legal Course ixamBee

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