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Contents of Prospectus as per The Companies Act, 2013

contents of prospectus pdf

Contents of Prospectus according to the Companies Act, 2013 for filling and issuing the prospectus, must be signed and dated and contain all the necessary information. Let’s first understand the prospectus meaning in company law. A prospectus is a document given by the company inviting the public and investors to the subscriptions of securities of a public company.

Now, let’s define prospectus in company law, the definition of prospectus is any advertisement, circular, or any other document that gives an invitation to public offer for the purchase of any securities.

We shall now discuss the prospectus and its contents in detail covered under the prescribed section of the Companies Act, 2013.

What Are the Given Contents of Prospectus in Company Law 2013?

The content of the prospectus for filing and issuing the prospectus of a public company. It shall set out such reports on financial information as may be specified by the Securities & Exchange Board (SEC) in consultation with the Central government.

The content of the prospectus should include all the following points: -

1. Name of company and address of registered office, company secretary, legal advisors, etc.

2. Date on which the issue is opened and closed.

3. Statement of the Board of directors of the company regarding

  • Separate bank accounts where receipts of issues are to be maintained.
  • Details of the utilization of receipts and non-utilization of the same in previous issues.

4. Consent of directors, auditors, and bankers to the issue and opinion of experts is included in the Contents of Prospectus.

5. Authority for the issue and details of the resolution passed for it.

6. Process and time scheduled for the allotment as well as the issue of securities.

7. The capital structure of the company

8. The main aim of a public offer.

9. Risk factors and any pending legal dispute of the project.

10. Minimum subscription amount and the amount payable on the premium

11. Details of directors related to remuneration and their interest in the company.

12. Financial Information Reports like Auditor’s reports, Profit and loss accounts, and business & transaction reports.

You can download the Contents of Prospectus in Company Law Pdf from the web browser.

What Are the Essentials for A Document to Be Called a Prospectus?

For any document to be considered a prospectus, it shall satisfy two conditions:

1. The document should invite the subscription to public shares or debentures, or it should invite deposits.

2. The invitation shall be made to the public

3. The invitation shall be made by the company or on the behalf of the company

4. The invitation shall relate to shares or debentures.

What is a Statement in lieu of prospectus?

Every public company issues a prospectus or files a statement in lieu of the prospectus. This statement is not necessary for a private company. The contents of prospectus, In the case of a private company converting from a private to a public company, it must have either filed a prospectus when issued earlier or has filed a statement in lieu of prospectus.

What are various types of prospectus in Company Law 2013?

Here are the various types of prospectus in company law 2013 are as follows:

1. Shelf Prospectus –

A Shelf prospectus is issued at the time of the first offer of the securities of the company under the relevant provisions of the Companies act, 2013. The issuer company of the prospectus has to mention the validity of this prospectus. The validity cannot exceed a year.

2. Red Herring Prospectus –

Red herring prospectus companies act 2013 is a prospectus that does not have contents of prospectus about complete information about the quantum of the price of the securities issued by the company. A company may issue a red herring prospectus before the issue of the prospectus when it is proposing to make an offer of securities.

In case there is any type of variation between a red herring prospectus and a prospectus that is issued then it must be highlighted as a variation.

3. Abridged Prospectus –

The provision of the Companies Act, 2013 abridged prospectus meaning that when a company is issuing a purchase of securities, it must be accompanied by an abridged prospectus. 

The prospectus includes all the details in brief for making it fast and easy for an investor to read and understand all the information in short. The contents of prospectus PPT give a better representation of the features of a prospectus.

4. Deemed Prospectus –

When any company is going to offer securities to the public, allots or agrees to allot securities, the document will be considered as a deemed prospectus as provided by the relevant provision of the Companies Act, 2013.

What is the Misstatement in Prospectus?

The prospectus is the document that is trusted by the public for subscribing to the securities of the company. A misstatement in the prospectus is held when a false or misleading statement is given and issued in the prospectus.

Any matter which is deleted and included that misleads the public is also a misstatement under the companies act. In short, the contents of prospectus shall not mislead the public. Any misstatement by the prospectus can result in punishment. In case of any misstatement, the defaulter will be punished as per the mentioned punishments in the Companies Act.

There are two kinds of misstatement liability: -

1. Civil Liability

2. Criminal Liability

Closure Now…

The prospectus is the lawful document having detailed information regarding the company. It is a form of an invitation to the public for subscribing to the shares or debentures of the company. The prospectus is a very important document of a company.

A prospectus for being valid must contain essential requirements and it must be registered. We have discussed the contents of prospectus, a statement in lieu, types of the prospectus, and misstatements in the prospectus in detail.

However, the prospectus must be true and correct, any misleading statement should not be published by the company.


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