Section 2(36) of the companies Act defines a prospectus.
“A prospectus means:-
Any documents described or issued as a prospectus and includes –
any notices, circular, advertisement, or other documents inviting deposit fro the public or
documents inviting offer from the public for the subscription of shares or debentures in a company”
A prospectus is not merely an advertisement. A document shall be called a prospectus if it satisfy two things:
- It invites subscription to shares or debentures or invites deposits.
- The aforesaid invitation is made to the public.
Rules relating to Prospectus:
- Prospectus should be in written form.
- Prospectus must be dated
- It must be registered
- It must be issued within 90 days of registration, otherwise the registration is cancelled after 90 days of registration, if it is not issue during the 90 days.