What is prospectus and lieu of prospectus?
Prospectus refers to a legal-document published by the company to invite general public for subscribing its shares and debentures. Statement in lieu of prospectus is a document issued by the company when it does not offer its securities for public subscription. Objective. To encourage public subscription.
When should a statement in lieu of prospectus be issued?
When a company does not offer its securities for public subscription, it issues a statement in lieu of prospectus. When a firm does not submit a prospectus to the public in order to invite them to subscribe for shares, a Statement in Lieu of Prospectus is submitted with the Registrar of Companies ( ROC ).
Which company must file statement in lieu prospectus?
Every public company either issue a prospectus or file a statement in lieu of prospectus. This is not mandatory for a private company. But when a private company converts from private to public company, it must have to either file a prospectus if earlier issued or it has to file a statement in lieu of prospectus.
What is a prospectus of a company?
A company’s prospectus is a formal legal document designed to provide information and full details about an investment offering for sale to the public. Companies are required to file the documents with the Securities and Exchange Commission (SEC).
What are the characteristics of prospectus?
Characteristics of Prospectus:
- It is a document described or issued as a prospectus.
- It includes any notice, circular, advertisement, inviting deposits from the public or other document.
- It is an invitation to the members of the public.
- The public is invited to subscribe the shares or debentures of the company.
What is doctrine of ultra vires?
The Doctrine of Ultra Vires is a fundamental rule of Company Law. It states that the objects of a company, as specified in its Memorandum of Association, can be departed from only to the extent permitted by the Act.
How many types of prospectus are there?
According to the companies act 2013, there are four types of the prospectus, abridged prospectus, deemed prospectus, red herring prospectus, and shelf prospectus.
What are the objectives of prospectus?
Objectives of Issuing Prospectus: To bring to the notice of the public that a new company has been formed. To preserve the authentic record of the terms and allotment on which the public have been invited to buy shares or debentures of the company.