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Sukhpreet Kaur, Lovely Professional University Unit 7: Prospectus

Unit 7: Prospectus Notes

CONTENTS
Objectives
Introduction

7.1 Prospectus – Definition and Meaning
7.1.1 Prospectus by Implication (Deemed Prospectus)
7.2 Contents of Prospectus

7.3 Shelf Prospectus and Information Memorandum
7.4 Red Herring Prospectus
7.5 Abridged Prospectus
7.5.1 When ‘Abridged Prospectus’ is not Necessary
7.6 Misstatements in Prospectus and their Consequences

7.7 Statement in Lieu of Prospectus
7.8 Underwriting Commission and Brokerage
7.9 Summary

7.10 Keywords
7.11 Review Questions
7.12 Further Readings

Objectives

After studying this unit, you will be able to:
Define prospectus;

Know content of prospectus;
Describe information memorandum;
Explain abridged prospectus;

Explain statement in lieu of prospectus.
Introduction

Prospectus or statement in lieu of prospectus to be filed by private company on ceasing to be
private company. Every prospectus filed under sub-section (1) shall state the matters specified in
Part I of Schedule II and set out the reports specified in Part II of that Schedule, and the said Parts
I and II shall have effect subject to the provisions contained in Part III of that Schedule.

Every statement in lieu of prospectus filed under sub-section (1) shall be in the form and contain
the particulars set out in Part I of Schedule IV, and in the cases mentioned in Part II of the
Schedule, shall set out the reports specified therein, and the said Parts I and II shall have effect
subject to the provisions contained in Part III of that Schedule.

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