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Is issue of prospectus required?

Is issue of prospectus required? (Is the Issue of Prospectus Compulsory ? )

 

It is not necessary for every company to issue a prospectus. A private company cannot issue prospectus to the public. A public company is required to issue prospectus to raise capital from the public. But a public company is not required to issue prospectus in the following cases

 

1. If the application was issued in connection with the actual issue of any such person

 

who has entered into an underwriting agreement with the company for shares or debentures.

 

2. If the issue of shares or debentures is to the existing shareholders or debenture holders only

 

It is to be done.

 

3. If there is an issue of shares or debentures which are closely related to the shares or debentures issued earlier and which are dealt with in a certified stock market.

 

4. If inviting public for shares and debentures is prohibited.

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