A document described or issued as prospectus and
includes any notice, circular, advertisement or other
document inviting deposits from the public or inviting
deposits from the public for subscription or purchase of
shares or debentures of a company.
WHICH COMPANIES ARE REQUIRED TO ISSUE PROSPECTUS:
Every public listed company who intends to offer shares
or debentures of the company to the public.
Every private company who ceases to be a private
company and converts into a public company and
intends to offer shares or debentures of the company to
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
(i)Name and address of registered office of company.
(ii)Name of stock exchange where application for
listing is made.
(iii)Date of opening of the issue.
(iv)Date of closing of the issue.
(v)Name and address of companies manager and
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.
A prospectus must not be issued more
than 90 days after the date on which a
copy there of 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
A public limited company, 1. which has not
issued a prospectus.2.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.
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.
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.
Contents of the Memorandum with the names,
addresses and occupations of the signatories of the
memorandum and the number and value of shares
subscribed by them and their interest in the property
and profits of the company.
This content is not required if the prospectus is
published in newspaper or issued after 2 years from the
commencement of business.
2. Description of the business and length of time during
which the business of the company has been carried on.
3. Names, addresses and occupation of proposed or
existing Chief Executive, directors, secretary and any
other Company in which they hold office.
4. Remuneration to Chief Executive and directors.