It is a document issued by the public limited company at the
time of raising money from public, either as shares or debentures. The thing is
that, nobody is going to invest his money in the company without looking at
proper records and profit earning ability of that company. That is why, company
issued prospectus which says everything about the company like its preceding five
year balance sheet, profit and loss statement,
name and address of the company and their directors, qualification of
the directors, name and address of the signatories of the memorandum of
association and shares held by them, etc and many more important things.
After reading this, if the public are tempted to invest their
money they will apply accordingly.
Actually, company act also requires the public limited company
to issue its prospectus at the time of raising its capital from public so that
the general public gets full information about the company.
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