Explain the following concept:

Prospectus

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1 Answers

  • A prospectus is any document that invites deposits or offers from the public for the purchase of any shares or debentures of a company.
  • When a public company is collecting capital by issuing shares to the public has to issue a prospectus.
  • The prospectus must be true and factual as investors decide to invest based on the information given in the prospectus.
  • The types of the prospectus issued by a company are:
  • Abridged Prospectus 
  • Shelf Prospectus 
  • Red Herring Prospectus 
  • Letter of offer 
  • Offer Letter

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