Prospectus &CONTENTS OF THE PROSPECTUS

Prospectus
Any document issued by a company inviting the public to
buy shares or debentures comes under the definition of prospectus.
It serves as a “window through which a prospective investor can
look into the soundness of a company’s venture” By going through
the information and other particulars, the prospective investors are
encouraged to invest in the shares of the company. A private limited
company is prohibited from issuing a prospectus.
CONTENTS OF THE PROSPECTUS
In order to protect the interests of the investors the
following points must be given in a prospectus :
1. The main objects of the company.
2. The names, addresses, description and occupations of the
signatories to memorandum and the number of shares
subscribed by each of them.
3. The kinds of shares with their total numbers and rights
attaching to each class of shares.
4. Qualification shares which a member must hold in order to
be eligible for election as director. It is fixed by the Articles
5. The names, addresses, descriptions and occupations, the
interest, rights and remuneration of the directors, managing
directors and the secretaries and treasures.
6. The minimum subscription required for allotment of shares
7. The amount payable along with application and on allotment
of each class of shares which is being issued.
8. The time during which subscriptions list will remain open
9. The main points of any contract or proposed contract
relating to preferential rights given to shares or debentures
of the company.
10. The amount of premium or discount on shares
11. The names of underwriters if any.
12. Particulars about reserves and surpluses.
13. The amount of preliminary expenses .
14. The names and addresses of the auditors.
15. Particulars regarding voting rights at the meetings of the
company.
16. A report by the auditors regarding the profits and losses of
the company.