Q6- Define a prospectus. What are its contents?
A prospectus is an invitation, advertisement, or circular asking people to invest and subscribe in the share capital of the company. For a private company prospectus is not required. Even for a public company it is not compulsory. If a public company does not want to issue prospectus, it must, then, file a statement in lieu of prospectus with the registrar. The prospectus must be signed by at least two directors.
Contests Of Prospectus:
The silent features’ of the prospectus are:
1. The contents of the memorandum of association
2. The number of promoters, shares, the nature and extent of their interest held in the company
3. Number of redeemable shares.
4. Qualification shares of directors.
5. The name of underwriters of shares, if any
6. Full description of directors of the company
7. Allotment, installments, and forfeiture of shares.
8. Preliminary expenses
9. Promoters fees
10. The name, address, and qualification of auditors.
11. Minimum subscription of shares
12. Nature of debentures, if any, and their underwriters.
13. Name and date of material contract relating to the company property.