COMPANY PROSPECTUS GOURAB TRITAL

DEFINITION A document described or issued as prospectus and includes any notice, circular, advertisement or other document inviting deposits from the public or inviting the offers from public for subscription or purchase of shares or debentures of a company.

MEANING Company prospectus is released by company to inform the public and investors of the various securities that are available. These documents describe about mutual funds, bonds, stocks and other forms of investments offered by the company. A prospectus is generally accompanied by basic performance and financial information about the company.

LEGAL REQUIREMENTS OF PROSPECTUS A Prospectus is required to be issued only after the incorporation of company. The prospectus must contain all the particulars, listed in the schedule II of Companies act. The prospectus must be dated. Before a prospectus is issued, a copy of it must be registered with the registration of companies. Prospectus shall be issued within ninety days of its registration .

CONTENTS OF A PROSPECTUS GENERAL INFORMATION Name and address of registered office of company. Name of stock exchange where application for listing is made. Date of opening of the issue. Date of closing of the issue. Name and address of companies manager and managing directors

CONTINUED... 2. CAPITAL STRUCTURE OF COMPANY Authorized, issued, subscribed, and paid-up capital. Size of the present issue giving separately reservation for preferential allotments to promoters and others. 3. PARTICULARS OF THE ISSUE Objects Project cost. Means of financing.

CONTINUED... 4. OUTSTANDING LITIGATION Relating to financial matters or criminal proceedings against the company or directors under Schedule. 5. CERTAIN PRESCRIBED PARTICULARS In regard to the company and other listed companies under the same management, which made any capital issue during the last 3 years.

FORMALITIES IN ISSUING COMPANY PROSPECTUS Every prospectus issued by or on behalf of a company must be dated and that date shall unless the contrary is proved, be regarded as the date of its publication. (section 55) A copy of the prospectus signed by every director or proposed director or by his agent must be delivered to the registrar on or before the date of publication. The prospectus issued to the public should mention that a copy of the prospectus along with the specified documents have been filed with the register.

CONTINUED... A prospectus must not be issued more than 90 days after the date on which a copy thereof is delivered for registration. If a prospectus is so issued it will be deemed to be a prospectus a copy of which has not been delivered to the registrar.

STATEMENT IN LIEU OF A PROSPECTUS A public limited company which has not issued a prospectus. which has issued a prospectus, but has not proceeded to allot any of the shares, offered to the public for subscription, is required to deliver to Registrar a “statement in lieu of prospectus” for registration, at least three days before the allotment of shares or debentures.

CONTINUED... Schedule III contains the details of the particulars to be furnished. In case of private company becoming a public company, statement in lieu of the prospectus can be filed. Schedule IV contains the details of the particulars to be furnished for the same. Such a statement is required to be signed by every person, who is named therein as a director or a proposed director, of the company, or by his agent authorized in writing.

CONTINUED…. If allotment of shares or debentures is made without filing the statements in lieu of prospectus, the allottee may avoid it within two months after the statutory meeting, or where no such meeting is to be held, within two months of the allotment. Contravention also renders the company and every director liable to fine up to rupees 10,000.

RULES OF PUBLIC DEPOSITS No deposit can be invited, without an advertisement specifying the financial conditions, management structure and other required particulars of the company. Declaration as to repayment of the deposit, in accordance with the terms and condition. Provision for nomination to be available. No deposit payable on demand or repayable before three months can be accepted. A company cannot accept deposits, repayable after three years. A company cannot accept deposits beyond 10% of the paid-up capital.

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