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WHAT IS PROSPECTUS?
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Answer Posted / shweta
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. The companies Act,
1956 defines prospectus as any document described or issued
as a prospectus and include any notice, circular,
advertisement or other documents inviting deposits from the
public or inviting offer from the public for the
subscription of shares. It is circulated among the public
in printed pamphlets. It gives all necessary information
about the company so that the prospective shareholders may
fully understand the objectives and the plans of the
company.
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