Professional Documents
Culture Documents
PROSPECTUS
DEFINITION
A document described or issued as
prospectus and includes any notice, circular,
advertisement or other document inviting deposits from
the public or inviting the offers from public for subscription
or purchase of shares or debentures of a company.
MEANING
Company prospectus is released by company to inform
the public and investors of the various securities that are
available. These documents describe about mutual funds,
bonds, stocks and other forms of investments offered by the
company. A prospectus is generally accompanied by basic
performance and financial information about the company.
LEGAL REQUIREMENTS OF
PROSPECTUS
GENERAL INFORMATION
RISKY INVESTMENT.
HARMFUL SPECULATION.
Preference shares
According to section 85 (1) Preference share
capital means, with reference to any company
limited by shares, whether formed before or after
the commencement of this Act, that part of the
share capital of the company which fulfils both the
following requirements, namely:
(a) that as respects dividends, it carries or will
carry a preferential right to be paid a fixed
amount or an amount calculated at a fixed rate,
which may be either free of or subject to income-
tax; and
(b) that as respects capital, it carries or will carry,
on a winding up or repayment of capital, a
preferential right to be repaid the amount of the
Advantages
1. Raising long
3. Repayment of capital.
1. Permanent burden
2. Not advantageous to investors
2. Reasonable time
3. Unconditional
4. communicated
Statutory restriction on
allotment
1. Minimum subscription
1. Liable to be fined
Meaning:
Special Resolution
Not exceeding 10% of
the total paid-up equity -Listed Companies by Postal
Ballot
capital and free reserves
of the Company. -Unlisted Companies by
General Meeting
For example: