Prospectus and Statement in lieu of prospectus Dr

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Prospectus and Statement in lieu of prospectus Dr. J. Pandu Rangarao Asst. Professor in

Prospectus and Statement in lieu of prospectus Dr. J. Pandu Rangarao Asst. Professor in Commerce P. R. Govt College (A) Kakinada.

• What are the sources of Finance? • To raise capital from the

• What are the sources of Finance? • To raise capital from the general public, the first and foremost requirement of a public company is to issue a Prospectus A prospectus is a document which contains all the relevant details about the company which can affect an investor’s decision.

• Then What is statement in lieu of prospectus? • When issued: Section

• Then What is statement in lieu of prospectus? • When issued: Section 70(1) requires a public company having a share capital to file with the Registrar of Companies a statement called “Statement in lieu of prospectus” in the following cases: • it is issued when the company does not invite public subscription.

CONTENTS OF PROSPECTUS 1. The contents of the Memorandum with the particulars of signatories

CONTENTS OF PROSPECTUS 1. The contents of the Memorandum with the particulars of signatories and number of shares subscribed by them. 2. The number and value of shares. 3. Description of business to be undertaken and its prospects. 4. Any provision in the articles relating to remuneration of directors and chief executives. 5. Particulars of the present and proposed directors, chief directors, managing agents and secretary.

CONTENTS OF PROSPECTUS 6. The amount of minimum subscription. 7. The date and time

CONTENTS OF PROSPECTUS 6. The amount of minimum subscription. 7. The date and time of the opening and closing of the subscription list. 8. The amount payable on application for each share. 9. The number, description and amount of share capital issued within the two preceding years along with the amount of premium or discount, if any. 10. Name of the underwriters, if any along with opinion of directors as to financial soundness of underwriters.

CONTENTS OF PROSPECTUS 11. The name and address of auditors and legal advisors. 12.

CONTENTS OF PROSPECTUS 11. The name and address of auditors and legal advisors. 12. The amount of preliminary expenses. 13. The right of voting at meeting s of the company. 14. Particulars of capitalization of any reserves or profits if any. 15. Particulars of surplus on revaluation of the assets and the manner in which surplus has been applied, adjusted or treated.

LIABILITIES ARISING OUT OF UNTRUE STATEMENT When there is any untrue statement in the

LIABILITIES ARISING OUT OF UNTRUE STATEMENT When there is any untrue statement in the prospectus, there arises two types of liabilities: • Civil Liability • Criminal Liability

DIFFERENCES B/W PROSPECTUS AND SILOP PROSPECTUS : STATEMENT IN LIEU OF PROSPECTUS: 1. Filed

DIFFERENCES B/W PROSPECTUS AND SILOP PROSPECTUS : STATEMENT IN LIEU OF PROSPECTUS: 1. Filed by a public unlisted company. 2. Has NOT been defined in definitions. 3. Submitted only to registrar. 1. Filed by a public listed company. 2. Has been defined in definitions Sec. 2 (29) 3. Submitted to registrar, commission and shareholders. 4. Is a document containing an 4. Is not an invitation of advertisement for invitation of subscription from the public.

DIFFERENCES B/W PROSPECTUS AND SILOP PROSPECTUS : STATEMENT IN LIEU OF PROSPECTUS: 5. Approval

DIFFERENCES B/W PROSPECTUS AND SILOP PROSPECTUS : STATEMENT IN LIEU OF PROSPECTUS: 5. Approval of commission must be 5. Is not a kind of advertisement for obtained within 60 days before the invitation of subscription. issue of prospectus. 6. No prescribed form is specified in 6. Is filed on prescribed form. this Ordinance. 7. No prospectus shall be issued 7. It is filed with the registrar unless before the date of its concerned at least 3 days before publication, a copy signed by the first allotment of shares directors or their agent has been delivered to the registrar

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