PROSPECTUS in company law useful to all.

Prospectus

1. PROSPECTUS

2. Prospectus: Section 2(70) of the Companies Act, 2013 defines a prospectus as “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 a body corporate.” Ingredients of prospectus: There must be an invitation to the public; The invitation must be made “by or on behalf of the company or in relation to an intended company”; The invitation must be “to subscribe or purchase”; The invitation must relate to any securities of the company. Prospectus.

3. Red Herring Prospectus Shelf Prospectus Abridged Prospectus Deemed Prospectus Types of Prospectus

4. Red herring Prospectus [Sec.32] The section permits a company to issue red-herring prospectus prior to issue of a prospectus. The expression “red herring prospectus” means a prospectus which does not include complete particulars of the quantum or price of the securities included therein. A company proposing to issue a red herring prospectus shall file the same with the Registrar at least three days prior to the opening of the subscription list and the offer Upon the closing of the offer of securities, the company is required to file with the Registrar and the Securities and Exchange Board, prospectus stating therein the total capital raised, and the closing price of the securities and any other details as are not included in the red herring prospectus. What is Red Herring Prospectus?

5. Shelf Prospectus [Sec.31] “shelf prospectus” means 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. Thus, where a company wishes to access capital market more than once during a year, it need not issue further prospectus in respect of a second or subsequent offer of securities included in such prospectus for a period of one year Filing of information memorandum : A company filing a shelf prospectus, is also required to file information memorandum containing all material facts of new changes created, and changes in financial position of the company with the Registrar which occurred prior to the issue of a second or subsequent offer under shelf prospectus. What is Shelf Prospectus?

6. Abridged Prospectus means the memorandum as prescribed in Form 2A under sub-section (3) of section 56 of the Companies Act, 1956. It contains all the salient features of a prospectus. It accompanies the application form of public issues. What is Abridged Prospectus?

7. Sec25(1) where a company allots/agrees to allot Any shares or debentures to issue house with a view to offer them as sale to public, then Any document by which offer is made is  DEEMED  to be a  PROSPECTUS  issued by the company.. What is Deemed Prospectus?

8. 1 .  Address of the registered office of the company. 2.  Name and address of company secretary, auditors, bankers, underwriters etc. 3.  Dates of the opening and closing of the issue. 4.  Declaration about the issue of allotment letters and refunds within the prescribed time. 5.  A statement by the board of directors about the separate bank account where all monies received out of shares issued are to be transferred. 6.  Details about underwriting of the issue. 7.  Consent of directors, auditors, bankers to the issue, expert’s opinion if any. 8.  The authority for the issue and the details of the resolution passed therefore. 9.  Procedure and time schedule for allotment and issue of securities. 10.  Capital structure of the company. 11.  Main objects and present business of the company and its location. 12.  Main object of public offer and terms of the present issue. 13.  Minimum subscription, amount payable by way of premium, issue of shares otherwise than on cash. 14.  Details of directors including their appointment and remuneration. 15.  Disclosure about sources of promoter’s contribution. 16.  Particulars relation to management perception of risk factors specific to the project, gestation period of the project, extent of progress made in the project and deadlines for completion of the project. Contents of Prospectus

9. A public company, which does not raise its capital by public issue, need not issue a prospectus. In such a case a statement in lieu of prospectus must be filed with the Registrar 3 days before the allotment of shares or debentures is made. It should be dated and signed by each director or proposed director and should contain the same particulars as are required in case of proper Prospectus. What is Statement in lieu of Prospectus?