CAPITAL MARKETS DEVELOPMENT AUTHORITY Prospectus Preparation Sherani & Co Barristers & Solicitors 22/04/2018

1. Modes of doing Business As a sole proprietor As a partnership As a company registered under the Companies Act. 22/04/2018

2. Types of Companies There are 4 types of Companies :- Company limited by shares Company limited by guarantee and not having a share capital Company limited by guarantee and having a share capital Unlimited Company 22/04/2018

3. Private Company The Companies are then further divided into private and public companies. All companies which are not private are public. Private Company is defined to mean a company which by its articles:-   (i)  restricts the right to transfer shares (ii)  limits the number of its members to fifty (iii) prohibits any invitation to the public for any shares or debentures of the company. Text Text Text Text Text Text Text Text Text 22/04/2018

4. Public Company The greatest advantage that a public company has is that it can go to the public to raise capital by a public float of its shares and /or debentures. 22/04/2018

5. Capital Markets Development Authority statutory functions:- To advise the Minister on all matters relating capital markets To approve an entity as securities exchange To grant licences to brokers etc To inquire into any public company To suspend or cancel the listing of any securities To take measures to safeguard the persons dealing in securities To suppress illegal and improper practices 22/04/2018

6. Requirement of Prospectus Provides protection to investors Initially of prospectus was dealt with under Part III of the Companies Act CMDA Act has supplementary provisions 22/04/2018

7. Prospectus under CMDA Act S.48 - Authority scrutinises proposals S.49 - Prospectus in writing and to contain all necessary information S.50 - Expert’s statement with consent S.51 - All certificates and documents to be attached. Prospectus to be signed issuer, all directors of the issuer and the promoter S.52 - Registrar refuses registration if prospectus false etc. S.54 - Authority may suspend or cancel prospectus if found to be false 22/04/2018

8. Form and Content of Prospectus S. 42 (1) of the Companies Act previously governed from and content Matters contained in Part 1 of the fourth schedule and reports specified in Part II S. 42 (3) of the Act - prospectus only necessary where offer public. The Capital Market Development Authority (Securities Issues) Regulations l999 22/04/2018

9. Prospectus – First Schedule Clause 1 - main terms of the offer 2 - details of incorporation 3 - Principal Subsidiaries 4 - Directors and advisers 5 - restrictions on director’s powers 6 – substantial shareholders of issuer 7 – activities of issuing group 22/04/2018

First Schedule - continued 8 - Summary of Financial Statements 9 - Prospects and Forecasts 10 - Initial Flotations 11 - Acquisition of business or subsidiary 12 - Securities paid otherwise than cash 13 - Options to subscribe 14 - Appointment + retirement of directors 15 - Directors’ interests 22/04/2018

First Schedule - continued 16 - Promoters’ interests 17 - Material Contracts 19 - Preliminary and issue expenses 20 - Restrictions on issuing group 21 - Other terms of offer and securities 22 - Requirements in respect of financials 23 - Places of inspection of documents 22/04/2018

First Schedule - continued 24 - Other material matters 25 - Directors statement 26 - Auditor’s report 22/04/2018

10. Civil Liability for mis-statement in Prospectus Liability under the Companies Act (s.47) Liability at Common Law Liability under the Fair Trading Act.   22/04/2018

Civil Liability for mis-statement in Prospectus - cases Houldsworth v City of Glasgow Bank Potts v Miller Derry v Peek Hedley Byrne & Co Ltd v Heller & Partners Ltd Shaddock [L] & Associates Pty Ltd & Anor v Parramatta City Council 22/04/2018

11. Criminal Liability for mis- statements and Prospectus S. 42 (4) of Companies Act provides a fine not exceeding $1,000.00 if no proper prospectus issued. S.44 (2) – fine if consent of expert not obtained. S.48 (1) – deals with untrue statements in prospectus 22/04/2018

12. Remedies Damages Recission Injunction 22/04/2018