What is a Prospectus?
This is a document of notice, circular, advertisement or other invitation offering to the public for subscription or purchase of shares or debentures of a company. A prospectus is issued by the public limited liability companies and it serves as a mechanism for raising capital.
A prospectus is also known as a fact sheet containing data on the company’s finances. Investors use the prospectus to evaluate securities that are offered for sale.
For members of the public not be misled, it is mandatory that a copy of the prospectus be filed with the Registrar of companies and in certain cases approved by the council of the stock exchange.
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