It is valid for one year from the date of opening of offer. It is mandatory for a company to provide correct information in the prospectus or it would be liable for misrepresentation and fraud.Ī shelf prospectus is filed with the registrar when the company goes for IPO (Initial Public Offering) or subsequent offer and is coupled with an information memorandum. A prospectus contains information about the financial position of the company, its directors, signatories to the memorandum, the objects of public offer, additional charges created, changes in the finance etc. (70) – “prospectus” means any document described or issued as a prospectus and includes a red herring prospectus referred to in section 32 or shelf prospectus referred to in section 31 or any notice, circular, advertisement or other document inviting offers from the public for the subscription or purchase of any securities of body corporate Ī prospectus is any document through which a company communicates and invites the public to invest into it and subscribe or purchase its securities. So, understanding what a prospectus is becomes the first step in understanding the whole concept. Sec2.(1) ?”abridged prospectus” means a memorandum containing such salient features of a prospectus as may be specified by the Securities and Exchange Board by making regulations in this behalf. The Companies Act, 2013 defines abridged prospectus as: An abridged prospectus is a summary of the prospectus containing such details as be prescribed by the SEBI.
The dictionary meaning of ‘abridge’ is to shorten something without destroying the meaning of the original.
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