What do you understand by company prospectus? What are the details given in the prospectus of the company? explain.
Meaning and Definition of Prospectus
A public company has to collect its capital along with obtaining the certificate of commencement of business. This work is given to the general public by issuing prospectus. According to the law, it is mandatory for a public company to issue prospectus only then it can receive capital from the public. A prospectus is a form by which a public company invites the public to purchase its shares, debentures or deposit deposits. In this, necessary information is provided by the company for the protection of investors and lenders. As per section 2 (70) of the Companies Act, 2013, “statement” means such form,
which is mentioned or issued in the form of a prospectus and contains the redemption referred to in section 32
Herring prospectus or shelf-statement referred to in section 31 or any notice, pamphlet, advertisement or other form soliciting an offer from the public to subscribe or purchase the securities of an incorporated entity.” According to Topham and Topham, “Statement” means a circular issued by the promoters
After the amalgamation of the company, its shares are published to the public for purchase.
It is thus clear that “Any form by which an offer is invited from the public for the purchase of deposits or shares or debentures for the company is called a prospectus”.