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    Prospectus

    Uploaded by

    Jimmi
    The prospectus is a legal document that provides information about a company's securities being offered for public sale. There are four types of prospectuses under Indian law: deemed, red herring, shelf, and abridged. A prospectus discloses details about the company's business, financial statements, objectives of any products being offered, and fees/costs. It allows investors to make informed decisions and notifies regulators of the securities issue.

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    © All Rights Reserved
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    Prospectus

    Uploaded by

    Jimmi
    103 views3 pages
    The prospectus is a legal document that provides information about a company's securities being offered for public sale. There are four types of prospectuses under Indian law: deemed, red herring, shelf, and abridged. A prospectus discloses details about the company's business, financial statements, objectives of any products being offered, and fees/costs. It allows investors to make informed decisions and notifies regulators of the securities issue.

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    The prospectus is a legal document that provides information about a company's securities being offered for public sale. There are four types of prospectuses under Indian law: deemed, red herring, shelf, and abridged. A prospectus discloses details about the company's business, financial statements, objectives of any products being offered, and fees/costs. It allows investors to make informed decisions and notifies regulators of the securities issue.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    103 views3 pages

    Prospectus

    Uploaded by

    Jimmi
    The prospectus is a legal document that provides information about a company's securities being offered for public sale. There are four types of prospectuses under Indian law: deemed, red herring, shelf, and abridged. A prospectus discloses details about the company's business, financial statements, objectives of any products being offered, and fees/costs. It allows investors to make informed decisions and notifies regulators of the securities issue.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    Prospectus

    Prospectus meaning
    1. The prospectus is a legal document, which outlines the
    company’s financial securities for sale to the investors.
    2. According to the companies act 2013, there are four types of the
    prospectus, abridged prospectus, deemed prospectus, red
    herring prospectus, and shelf prospectus.

    Prospectus Definition
    The prospectus is a legal document for market participants and
    investors to pursue, detailing the features, prospects, and promise of a
    financial product.
    It is mandated by the law to be supplied to prospective customers.

    Prospectus Example
    In an IPO, the prospectus tells potential shareholders about the
    company’s plans and business model.
    For insurance and investment fund customers, a prospectus lists out
    the objective of the product, inclusions, and exclusions, fees, etc.
    For an ETF, a prospectus informs likely investors of the fund’s goals,
    history, portfolio, fees and costs, and other financial details.

    What is a Prospectus and its


    importance?
    The company provides prospectus with capital raising intention.
    Prospectus helps the investors to make a well-informed decision
    because of the prospectus all the required information of the securities
    which are offered to the public for sale.
    Whenever the company issues the prospectus, the company must file
    it with the regulator. The prospectus includes the details of the
    company’s business, financial statements.

    1. To notify the public of the issue


    2. To put the company on record with regards to the terms of the
    issue and allotment process
    3. To establish accountability on the part of the directors and
    promoters of the company

    Types of prospectus
    According to Companies Act 2013, there are four types of prospectus.
    Deemed Prospectus – Deemed prospectus has mentioned under
    Companies Act, 2013 Section 25 (1). When a company allows or
    agrees to allot any securities of the company, the document is
    considered as a deemed prospectus via which the offer is made to
    investors. Any document which offers the sale of securities to the
    public is deemed to be a prospectus by implication of law.
    Red Herring Prospectus – Red herring prospectus does not contain
    all information about the prices of securities offered and the number of
    securities to be issued. According to the act, the firm should issue this
    prospectus to the registrar at least three before the opening of the
    offer and subscription list.
    Shelf prospectus – Shelf prospectus is stated under section 31 of the
    Companies Act, 2013. Shelf prospectus is issued when a company or
    any public financial institution offers one or more securities to the
    public. A company shall provide a validity period of the prospectus,
    which should not be more than one year. The validity period starts with
    the commencement of the first offer. There is no need for a prospectus
    on further offers. The organization must provide an information
    memorandum when filing the shelf prospectus.
    Abridged Prospectus – Abridged prospectus is a memorandum,
    containing all salient features of the prospectus as specified by SEBI.
    This type of prospectus includes all the information in brief, which
    gives a summary to the investor to make further decisions. A company
    cannot issue an application form for the purchase of securities unless
    an abridged prospectus accompanies such a form.

    What is prospectus and its contents?


    The prospectus contents are specified in the Companies Act. The
    prospectus must touch over the following content points:

    1. Details of the company, such as name, registered office address,


    and objects
    2. Details of signatories to the Memorandum and their shareholding
    particulars
    3. Details of the directors
    4. Details of shares offered and the class of the issue as well as
    voting rights
    5. Minimum subscription amount
    6. The amount payable on application, on allotment, and on further
    calls
    7. Underwriters of the issue
    8. Auditors of the company
    9. Audited reports regarded profit and losses of the company

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