Matters to be stated in the Prospectus :
Section 26 of the Companies Act, 2013 provides for the matters to be stated and the information to be given in the prospectus.
(1) Contents of the prospectus: Every prospectus issued by or on behalf of a public company either with reference to its formation or subsequently, or by or on behalf of any person who is or has been engaged or interested in the formation of a public company, shall be dated and signed and shall—
(a) state the following information, namely:—
(i) Names & addresses of registered office and the other persons (like company secretary, Chief Financial Officer, auditors, legal advisers, bankers, trustees, underwriters and such other persons as prescribed under the rules).
(ii) Dates of the opening and closing of the issue, and declaration made by Board or the committee about the issue of allotment letters and refunds of the application money within the 15 days from the closure of the issue or such lesser time as may be specified by SEBI;
(iii) A statement by the Board of Directors about the separate bank account where all monies received out of the issue are to be transferred and disclosure of details of all monies (utilized /un-utilized) out of the previous issue in the prescribed manner;
(iv) Details (the names, addresses, telephone numbers, fax numbers and e-mail addresses) of the underwriters and the amount underwritten by them;
(v) Consent of directors, auditors, bankers to the issue, expert’s opinion if any, and of such other persons, as prescribed under the rules;
(vi) Authority for the issue and the details of the resolution passed therefor;
(vii) Procedure and time schedule for allotment and issue of securities;
(viii) Capital structure of the company in the prescribed manner;
(ix) Main objects of public offer, terms of the present issue and such other particulars as may be prescribed;
(x) Main objects and present business of the company and its location, schedule of implementation of the project;
(xi) Other particulars relating to—
♦ management view of risk factors specific to the project;
♦ gestation period of the project;
♦ extent of progress made in the project;
♦ deadlines for completion of the project; and
♦ any litigation or legal action pending or taken by a Government
Department or a statutory body during the last five years immediately preceding the year of the issue of prospectus against the promoter of the company;
(xii) Minimum subscription, amount payable by way of premium, issue of shares otherwise than on cash;
(xiii) Details of directors including their appointments and remuneration, and such particulars of the nature and extent of their interests in the company as may be prescribed; and
(xiv) Disclosures of the sources of promoter’s contribution; in such manner as may be prescribed;
(b) set out the following reports for the purposes of the financial information, namely:—
(i) Reports by the auditors of the company with respect to its profits and losses and assets and liabilities and such other matters as may be prescribed.
(ii) Reports relating to profits and losses for each of the five financial years immediately preceding the financial year of the issue of prospectus including such reports of its subsidiaries and in such manner as may be prescribed:
However where a company with respect to which a period of five years has not past from the date of incorporation – there such a prospectus shall set out the reports relating to profits and losses for each of the financial years immediately preceding the financial year of the issue of prospectus including such reports of its subsidiaries;
(iii) reports made by the auditors upon the profits and losses of the business of the company for each of the five financial years immediately preceding issue and assets and liabilities of its business on the last date to which the accounts of the business were made up, being a date not more than one hundred and eighty days before the issue of the prospectus:
Whereas, in case of a company with respect to which a period of five years has not passed from the date of incorporation, the prospectus shall set out the reports made by the auditors upon the profits and losses of the business of the company for all financial years from the date of its incorporation, and assets and liabilities of its business on the last date before the issue of prospectus; and
(iv) Reports about the business or transaction to which the proceeds of the securities are to be applied directly or indirectly;
(c) Make a declaration about the compliance of the provisions of this Act and a statement to the effect that nothing in the prospectus is contrary to the provisions of this Act, the Securities Contracts (Regulation) Act, 1956 and the Securities and Exchange Board of India Act, 1992 and the rules and regulations made thereunder; and
(d) State such other matters and set out such other reports, as may be prescribed.
(2) Exception:— The above stated section does not apply to-
(a) to the issue to existing members or debenture-holders of a company, of a prospectus or form of application relating to shares in or debentures of the company, whether an applicant has a right to renounce (surrender) the shares or not under section 62(1)(a)(ii) in favour of any other person; or
(b) to the issue of a prospectus or form of application relating to shares or debentures which are, or are to be, in all respects uniform with shares or debentures previously issued and for the time being dealt in or quoted on a recognised stock exchange.
(3) Except the exceptions, the provisions of sub-section (1) shall apply to a prospectus or a form of application, whether issued on or with reference to the formation of a company or subsequently.
The date indicated in the prospectus shall be deemed to be the date of its publication.
(4) No requirement of issuing prospectus: No prospectus shall be issued by or on behalf of a company or in relation to an intended company unless on or before the date of its publication, there has been delivered to the Registrar for registration, a copy thereof signed by every person who is named therein as a director or proposed director of the company or by his duly authorised attorney.
(5) Expert not liable for the statement under the prospectus: The prospectus issued shall not include a statement purporting to be made by an expert, unless such an expert-
• is a person who is not, and has not been, engaged or interested in the formation or promotion or management, of the company, and
• has given his written consent to the issue of the prospectus and has not withdrawn such consent before the delivery of a copy of the prospectus to the Registrar for registration, and
• a statement to that effect shall be included in the prospectus.
(6) Prospectus to state the delivery of copy and documents to the registrar: Every prospectus issued shall, on the face of it,—
(a) state that a copy has been delivered for registration to the Registrar, and
(b) specify any documents required to be attached to the copy so delivered or refer to statements included in the prospectus which specify these documents.
(7) No registration of prospectus by the registrar: The Registrar shall not register a prospectus unless –
• the requirements of this section with respect to its registration are complied with, and
• the prospectus is accompanied by the consent in writing of all the persons named in the prospectus.
(8) Time period for the issue of prospectus: No prospectus shall be valid if it is issued more than ninety days after the date on which a copy thereof is delivered to the Registrar.
(9) In contravention of the provision: If a prospectus is issued in contravention of the provisions of this section, the company shall be punishable with fine varying from fifty thousand rupees to three lakh rupees and every person who is knowingly a party to the issue of such prospectus shall be punishable with imprisonment for a term which may extend to three years or with fine varying from fifty thousand rupees to three lakh rupees, or with both.