Question

At which stage in the formation of a company does it interact with SEBI?

Answer 1

A company interacts with the Securities and Exchange Board of India (SEBI) at the stage of capital subscription. This is because, at this stage of formation, the company is required to raise its funds from the general public through the medium of issue of shares and debentures. To do so, the company is required to follow the rules and guidelines prescribed by SEBI in order to protect the investors’ interests. Thus, it is necessary for the company to get SEBI’s approval before proceeding with the capital subscription.