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Prospectus new

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Prospectus new

  1. 1. Prepared by;
  2. 2. Introduction A formal legal document, which is required by and filed with the Securities and Exchange Commission, that provides details about an investment offering for sale to the public. A prospectus should contain the facts that an investor needs to make an informed investment decision. Also known as an "offer document."
  3. 3.  A formal offer document  It is required by and filed with the Securities and Exchange Commission(SEC India)  Provides details about an investment  Offering for sale to the public  It contain the facts that an investor needs to make an informed investment decision.
  4. 4. possibility no.1  When a company go to issue share or debenture on primary market  Before company issue a documents to public which contain all the details about the particular share or debt and company  Also a way to identify the profitability and growthness of business  It helps the public to take the decisions about the purchase of these share or debt on the basis of it  Time period normally 1 week only
  5. 5. possibility no.2  After the receipt of certificate of incorporation, if the promoters of a public limited company wishes to issue shares to the public, he will issue a document called prospectus.  It is an invitation to the public to subscribe to the share capital of the company
  6. 6. Objective’s Prospectus is issued with the following broad objectives:  It informs the company about the formation of a new company.  It serves as a written evidence about the terms and conditions of issue of shares or debentures of a company.  It induces the investors to invest in the shares and debentures of the company.  It describes the nature, extent and future prospectus of the company.  It maintains all authentic records on the issue and make the directors liable for the misstatement in the prospectus.
  7. 7. Contents,, The following important matter are included in the prospectus:  The name, addresses and occupation of directors and managing directors.  The number and classes of shares and debentures issued.  The qualification share of directors and the interest of directors for the promotion of company.  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.
  8. 8.  The name and addresses of the vendors of any property acquired by the company and the amount paid or to be paid.  particulars about the directors, secretaries and the treasures and their remuneration.  The amount for the minimum subscription.  If the company carrying on business, the length of time of such businesses.  The estimated amount of preliminary expenses.  Name and address of the auditors, bankers and solicitors of the company.
  9. 9.  Time and place where copies of balance sheets, profits and loss account and the auditors report may be inspected.  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.  If any profit or reserve has been capitalized, the particulars of such capitalization will be stated in the prospectus.
  10. 10. 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
  11. 11. STAEMENT IN LIEU OF A PROSPECTUS  A statement in lieu of prospectus. According to the companies' ordinance if a public company is not issuing a prospectus on its formation, it then must file a statement in lieu of prospectus with the registrar of the companies. A statement n lieu of prospectus is defined as: "A public document prepared in the second schedule of company's ordinance by every such public company which doesn't issue a prospectus on its formation with the registrar before allotment or shares of debentures, and signed y every person who is named therein.“ A statement in lieu of prospectus gives practically the same information as a prospectus and is signed by all the directors or proposed directors. In case, the company has not filed a statement in lieu of prospectus with the registrar, it is then not allowed to allot any of its shares or debentures.
  12. 12. A statement in lieu of the prospectus contains the information as described below 1- Name of the company 2- Statement of capital 3- Description of the business 4- Names, addresses, and occupation of directors 5- Estimated initial expenses 6- Names of vendors and details of property 7- Material contracts 8- Director's interest 9- Minimum subscription
  13. 13. TYPES OF PROSPECTUS  ABRIDGED PROSPECTUS  DEEMED PROSPECTUS  SHELF PROSPECTUS  RED HEARING PROSPECTUS  Pink-herring prospectus
  14. 14. Red-herring prospectus:  a prospectus that contains most of the information that will be presented in the final prospectus but often does not mention a price and/or the number of securities. A red-herring prospectus is alternatively known as a preliminary prospectus.  It can be distributed to potential investors after the registration statement for a securities offering has been filed with the securities commission.
  15. 15.  The public limited companies, which are yet to obtain the certificate of commencement of business, without filing of business, require the SLP (Statement in lieu of prospectus).  It must be filed when a Private company becomes a Public company.
  16. 16. Abridged prospectus  a shorter version of the prospectus that includes all the most key elements of the typical prospectus. An abridged prospectus contains information very similar to the typical prospectus but in a concise and compact form.  Both versions of the prospectus must comply with the disclosure requirements prescribed by the relevant securities commission.
  17. 17. Deemed prospectus:  a prospectus that is deemed to have been made by the issuer, though it is actually offered to the public by a third party or the so-called issue house (Indian terminology). The issuer saves the underwriting expenses in selling its securities.
  18. 18. Shelf prospectus  a prospectus that describes a set of unissued, but registered securities. It is used in situations where securities are issued in consecutive stages over a period of time because the size of issue is too large (and funds to be raised are enormous, making the filing of prospectus each time very expensive). Later on, an issuer will only need to file the so- called information memorandum with the relevant securities commission.
  19. 19. Pink-herring prospectus  a prospectus that is issued without disclosure of the number of securities being offered or, in an initial public offering, the estimated or indicative price range. It is a preliminary prospectus that precedes the filing of a red-herring prospectus.

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