Question

What is prospectus ?what are its contents? explain?

Answer 1

Section 2(70) of the Companies Act, 2013 defines a prospectus as ““A prospectus means Any documents described or issued as a prospectus and includes any notices, circular, advertisement, or other documents inviting deposit fro the public or documents inviting offer from the public for the subscription of shares or debentures in a company.” A prospectus also includes shelf prospectus and red herring prospectus. A prospectus is not merely an advertisement. 


A document shall be called a prospectus if it satisfy two things:

1. It invites subscription to shares or debentures or invites deposits.

2. The aforesaid invitation is made to the public.