Corporation Law
Content
Presented byPooja Adaniya
Prospectus • A prospectus commonly provides investors with material information about mutual funds, stocks, bonds and other investments, such as a description of the company's business, financial statements, biographies of officers and directors, detailed information about their compensation, etc.
• The companies Act, 1956 defines prospectus as any document described or issued as a prospectus and include any notice, circular, advertisement or other documents inviting deposits from the public or inviting offer from the public for the subscription of shares.
Objectives • Prospectus is issued with the following broad objectives: • It informs the company about the formation of a new company. • It serves as a written evidence about the terms and conditions of issue of shares or debentures of a company. • It induces the investors to invest in the shares and debentures of the company. • It describes the nature, extent and future prospects of the company. • It maintains all authentic records on the issue and make the directors liable for the misstatement in the prospectus.
Contents The following important matter are included in the prospectus: • Name and full address of the company. • Full particulars about the signatories to the memorandum of association and the number of shares taken up by them. • The number and classes of shares. The interest of shareholders in the property and profits of the company. • Name, address and occupations of members of the Board of Directors or proposed Directors. • The time of opening of the subscription list.
• The nature and extent of interest of every promoter in the promotion of the company. • The particulars of preferential treatment given to any person for subscribing shares or debentures. • Particulars about reserves and surpluses. • The amount of preliminary expenses. • The name and address of the auditor. • Particulars regarding voting rights at the meeting of the company. • A report by the auditors regarding the profits and losses of the company.
Where document should be registered • Document relating to immovable property should be registered in the office of Sub-Registrar of sub-district within which the whole or some portion of property is situated. • Other document can be registered in the office of SubRegistrar where all persons executing the document desire it to be registered • If some of the persons are unable to appear within 4 months, further time upto additional 4 months can be given on payment of fine upto 10 times the proper registration fee.
Registration by Registering Officer If the Registering Officer is satisfied about identity of persons and if they admit about execution of documents, and after registration fees are paid, the registering officer will register the document.
Certification of registration • The Registering Officer will endorse the document with word ‘Registered’, and sign the same. • The endorsement will be copied in Register. After registration, the document will be returned to the person who presented the document.
Introduction • Issued capital is the value of the shares issued to shareholders. • The amount of issued capital cannot exceed the amount of the authorised capital.
Types of share capital • Authorised share capital is also referred to, at times, as registered capital. It is the total of the share capital which a limited company is allowed (authorised) to issue. It presents the upper boundary for the actually issued share capital. • Issued share capital is the total of the share capital issued (allocated) to shareholders. This may be less or equal to the authorised capital.
Types of Issued shares • Shares outstanding are those issued shares which are not treasury shares. These are all the shares held by the investors in the company.[2]
• Treasury shares are those issued shares which are held by the issuing company itself, the usual result of a buyback.
Subdivision of Issued shares •
Subscribed capital is the portion of the issued capital, which has been subscribed by all the investors including the public. This may be less than the issued share capital as there may be capital for which no applications have been received yet ("unsubscribed capital").
• Called up share capital is the total amount of issued capital for which the shareholders are required to pay. This may be less than the subscribed capital as the company may ask shareholders to pay by installments. • Paid up share capital is the amount of share capital paid by the shareholders. This may be less than the called up capital as payments may be in installments
Prospectus • A prospectus commonly provides investors with material information about mutual funds, stocks, bonds and other investments, such as a description of the company's business, financial statements, biographies of officers and directors, detailed information about their compensation, etc.
• The companies Act, 1956 defines prospectus as any document described or issued as a prospectus and include any notice, circular, advertisement or other documents inviting deposits from the public or inviting offer from the public for the subscription of shares.
Objectives • Prospectus is issued with the following broad objectives: • It informs the company about the formation of a new company. • It serves as a written evidence about the terms and conditions of issue of shares or debentures of a company. • It induces the investors to invest in the shares and debentures of the company. • It describes the nature, extent and future prospects of the company. • It maintains all authentic records on the issue and make the directors liable for the misstatement in the prospectus.
Contents The following important matter are included in the prospectus: • Name and full address of the company. • Full particulars about the signatories to the memorandum of association and the number of shares taken up by them. • The number and classes of shares. The interest of shareholders in the property and profits of the company. • Name, address and occupations of members of the Board of Directors or proposed Directors. • The time of opening of the subscription list.
• The nature and extent of interest of every promoter in the promotion of the company. • The particulars of preferential treatment given to any person for subscribing shares or debentures. • Particulars about reserves and surpluses. • The amount of preliminary expenses. • The name and address of the auditor. • Particulars regarding voting rights at the meeting of the company. • A report by the auditors regarding the profits and losses of the company.
Where document should be registered • Document relating to immovable property should be registered in the office of Sub-Registrar of sub-district within which the whole or some portion of property is situated. • Other document can be registered in the office of SubRegistrar where all persons executing the document desire it to be registered • If some of the persons are unable to appear within 4 months, further time upto additional 4 months can be given on payment of fine upto 10 times the proper registration fee.
Registration by Registering Officer If the Registering Officer is satisfied about identity of persons and if they admit about execution of documents, and after registration fees are paid, the registering officer will register the document.
Certification of registration • The Registering Officer will endorse the document with word ‘Registered’, and sign the same. • The endorsement will be copied in Register. After registration, the document will be returned to the person who presented the document.
Introduction • Issued capital is the value of the shares issued to shareholders. • The amount of issued capital cannot exceed the amount of the authorised capital.
Types of share capital • Authorised share capital is also referred to, at times, as registered capital. It is the total of the share capital which a limited company is allowed (authorised) to issue. It presents the upper boundary for the actually issued share capital. • Issued share capital is the total of the share capital issued (allocated) to shareholders. This may be less or equal to the authorised capital.
Types of Issued shares • Shares outstanding are those issued shares which are not treasury shares. These are all the shares held by the investors in the company.[2]
• Treasury shares are those issued shares which are held by the issuing company itself, the usual result of a buyback.
Subdivision of Issued shares •
Subscribed capital is the portion of the issued capital, which has been subscribed by all the investors including the public. This may be less than the issued share capital as there may be capital for which no applications have been received yet ("unsubscribed capital").
• Called up share capital is the total amount of issued capital for which the shareholders are required to pay. This may be less than the subscribed capital as the company may ask shareholders to pay by installments. • Paid up share capital is the amount of share capital paid by the shareholders. This may be less than the called up capital as payments may be in installments
