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Chapter: 11th Commerce : Joint Stock Company

Prospectus - Joint Stock Company

According to Section 2(36) of the Companies Act, any document inviting the public to buy its shares or debentures comes under the definition of prospectus.

Prospectus

 

According to Section 2(36) of the Companies Act, any document inviting the public to buy its shares or debentures comes under the definition of prospectus. It also applies to advertisements inviting deposits from the public.

 

Contents

A prospectus is “the only window through which a prospective investor can look into the soundness of a company’s venture”. Hence it must specify at least the following matters as per Schedule II:

1.        The prospectus contains the main objectives of the company, the name and addresses of the signatories of the Memorandum of Association and the number of shares held by them.

2.        The name, addresses and occupation of directors and managing directors.

3.        The number and classes of shares and debentures issued.

4.        The qualification share of directors and the interest of directors for the promotion of company.

5.        The number, description and the document of shares or debentures which within the two preceding years have been agreed to be issued other than cash.

6.        The name and addresses of the vendors of any property acquired by the company and the amount paid or to be paid.

7.        Particulars about the directors, secretaries and the treasures and their remuneration.

8.        The amount for the minimum subscription.

9.        If the company carrying on business, the length of time of such businesses.

10.   The estimated amount of preliminary expenses.

11.   Name and address of the auditors, bankers and solicitors of the company.

12.   Time and place where copies of balance sheets, profits and loss account and the auditor’s report may be inspected.

13.   The auditor’s report so submitted must deal with the profit and loss of the company for each year of five financial years immediately preceding the issue of prospectus.

14.   If any  profit or reserve has been capitalized, the particulars of such capitalization will be stated in the prospectus.

 

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11th Commerce : Joint Stock Company : Prospectus - Joint Stock Company |


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