Define the term prospectus and explain the contents of a prospectus
ANSWER
A prospectus as “any prospectus, notice circular, advertisement or other invitation offering to the public for subscription or purchase any shares or debentures of a company.”
The contents of a prospectus include:
- Directors interest in the promotion of the company.
- Particulars of directors and remuneration
- Share qualification of directors
- Voting and class rights
- Minimum subscription
- Promoters remuneration
- Particulars of material contracts
- Amount payable on application and allotment
- Particulars of options on shares or debentures
- Length of time the company has carried on business if less than 3 years.