Allotment of securities by company
Section 39 of the Companies Act, 2013 deals with allotment of securities by company. No allotment of any securities of a company offered to the public for subscription shall be made unless the amount stated in the prospectus as the minimum amount has been subscribed and the sums payable on application for the amount so stated have been paid to and received by the company by cheque o The Act came into force on 01 Apr 2014.
(1) No allotment of any securities of a company offered to the public for subscription shall be made unless the amount stated in the prospectus as the minimum amount has been subscribed and the sums payable on application for the amount so stated have been paid to and received by the company by cheque or other instrument.
(2) The amount payable on application on every security shall not be less than five per cent. of the nominal amount of the security or such other percentage or amount, as may be specified by the Securities and Exchange Board by making regulations in this behalf.
(3) If the stated minimum amount has not been subscribed and the sum payable on application is not received within a period of thirty days from the date of issue of the prospectus, or such other period as may be specified by the Securities and Exchange Board, the amount received under sub-section (1) shall be returned within such time and manner as may be prescribed.
(4) Whenever a company having a share capital makes any allotment of securities, it shall file with the Registrar a return of allotment in such manner as may be prescribed.
(5) In case of any default under sub-section (3) or sub-section (4), the company and its officer who is in default shall be liable to a penalty, for each default, of one thousand rupees for each day during whichsuch default continues or one lakh rupees, whichever is less.
Section 39, The Companies Act, 2013 (Act 18 of 2013).
Judgments citing this section
These may be obiter dicta or a precedent, for you to study. These are the judgments where this section is quoted.
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… of banking companies The High Court shall, save as otherwise expressly provided in section 45C, have exclusive jurisdiction to entertain and decide any claim made by or against a banking company which is being wound up (including claims by or against any of its branches in India) or any application made under section 39 of the Companies Act, 1956 by or in respect of a banking company or any question of priorities or any other question whatsoever, whether of law or fad [sic fact] which may relate to or arise in the course of the winding up of a banking company , whether such claim or question has arisen or arises or such …
Made under this section, and citing it
7 instruments state that it was made under this provision — the power to make it comes from here, so a change to any of them changes what this section requires in practice. Newest first.
- G.S.R No. 37(E) Companies Prospectus and Allotment of Securities Amendment Rules 2023 dated 20.01.2023Rule 2023
- G.S.R. 642(E)-Companies (prospectus and allotment of securities) amdnt Rules 2020Rule 2020
- Companies (Prospectus and Allotment of Securities) Amendment Rules, 2019.Rule 2019
- Companies (Prospectus and Allotment of Securities) Third Amendment Rules, 2019Rule 2019
- Companies Prospectus and Allotment of Securities) Second Amendment Rules, 2019.Rule 2019
- Commencement notificationNotification 2018
- Chapter III - The Companies (Prospectus and Allotment of Securities) Rules, 2014.Rule 2014
Another 2 instruments name this provision in its title or its text without being made under it.
Questions about Section 39
What does Section 39 of the Companies Act deal with?
Section 39 of the Companies Act is headed "Allotment of securities by company". No allotment of any securities of a company offered to the public for subscription shall be made unless the amount stated in the prospectus as the minimum amount has been subscribed and the sums payable on application for the amount so stated have been paid to and received by the company by cheque o
How do I find court cases under Section 39 of the Companies Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Companies Act 39, section 39 Companies Act, section 39 of the Companies Act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome.
What should I read with Section 39 of the Companies Act, and has it changed?
The rules and notifications made under it are where it actually bites, and there are 7: most recently G.S.R No. 37(E) Companies Prospectus and Allotment of Securities Amendment Rules 2023 dated 20.01.2023 (2023), then G.S.R. 642(E)-Companies (prospectus and allotment of securities) amdnt Rules 2020 (2020), and 5 more.
When did Section 39 of the Companies Act come into force?
Section 39 of the Companies Act, cited as Companies Act 39, came into force on 01 Apr 2014, having been enacted on 29 Aug 2013. It is in force as at the date shown on this page.
Other sections of this Act
- 2. Definitions5089 words
- 143. Powers and duties of auditors and auditing standards1867 words
- 230. Power to compromise or make arrangements with creditors and members1432 words
- 232. Merger and amalgamation of companies1416 words
- 149. Company to have Board of Directors1403 words
- 217. Procedure, powers, etc., of inspectors1390 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 14 Oct 2026. This page is not a substitute for legal advice.