Prospectus - Definition - Law Dictionary Home Dictionary Definition prospectus

Definition :

Prospectus, giving complete information about the school/college which issues it. It is the instrument through which the school/college 'holds out' its contents or 'represent' to the general public interest, Sanjeev Dadhwa v. All India Institute of Medical Sciences, AIR 1995 Del 268.

Is a document which invites persons to take shares in a company and sets forth the advantages of the company an advertisement is also a prospectus, Paramatha Nath v. Kali Kumar, AIR 1925 Cal 714: (1925) ILR 51 Cal 440.

Prospectus, is defined by s. 380 of the (English) Companies Act, 1929, as any prospectus, notice, circular, advertisement, or other invitation offering to the public for subscription or purchase any shares or debentures of a company. By s. 35 of the Act every prospectus issued by or on behalf of a company or engaged or interested in its formation, must state the matters specified in Part I. of the 4th Schedule and set out the reports specified in Part II. of that Schedule, subject as to both parts to the provisions of Part III. ibid., and otherwise comply with the requirements of the Act. Any condition waiving compliance with this provision is void. The issue of any form of application for shares or debentures of a company unaccompanied by a prospectus is prohibited except in an offer to under writers or not to the public, or to existing members or debenture holders of the company. By s. 36, contracts referred to in a prospectus are not to be varied without the approval of the statutory meeting (q.v.). As to the liability of directors or others for statements in the prospectus, see s. 37, DIRECTORS and DECEIT. These requirements extend to offers by the purchasers of shares or debentures offered by the company to them with a view to sale by them to the public under s. 38, which was enacted in order to include offers by such purchasers which had not previously been deemed to be prospectuses. The statutory requirements as to dating and registering the prospectus are set out in s. 34, and among the provisions of the 4th Schedule (see supra), pros-pectuses, published as newspaper advertisements, need not include the contents of the memorandum and ancillary details. Under Part III. of the Schedule, the memorandum and similar details and some other particulars may be omitted from a prospectus which is issued more than two years after the company is entitled to commence business. As to prospectuses by companies incorporated outside Great Britain, see s. 354.

S. 356 prohibits house-to-house hawking of shares. Where shares are offered in writing for sale to any individual the offer must be accompanied by a statement complying with the requirements of that section. These requirements do not apply to offers of shares, dealings in which have been permitted by any recognized Stock Exchange in Great Britain or to shares allotted with a view to sale to the public under s. 38, or offers to persons whose regular business it is to buy and sell shares. Consult Palmer's Company Law.

Means a brief sketch describing the main features of some proposed enterprise, as the plan of a literary work, or the proposals of a new business; a descriptive outline of an established organization, as a college, Sanjeev v. Dadhwal v. All India Institute of Medical Sciences, AIR 1995 Del 268.