Section 2(36) of the companies Act defines a prospectus.

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“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:

  1. It invites subscription to shares or debentures or invites deposits.
  2. The aforesaid invitation is made to the public.

Rules relating to Prospectus:

  1. Prospectus should be in written form.
  2. Prospectus must be dated
  3. It must be registered
  4. 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.
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