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  • What's in a Prospectus?

Investigating New Offerings

How to get a company's prospectus.

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A company's prospectus is a formal legal document designed to provide information and full details about an investment offering for sale to the public. Companies are required to file the documents with the Securities and Exchange Commission (SEC) . The prospectus documents must be made available to a prospective public investor prior to purchase. Investors are encouraged to read and understand the terms of the offering before making a purchase decision.

Key Takeaways

  • A prospectus is a formal document that is required by and filed with the SEC that provides details about an investment offering for sale to the public.
  • This document is used to help potential investors make a more informed decision on whether or not to invest.
  • EDGAR is a public online tool that allows individuals and analysts to search for and retrieve corporate prospectus filings.
  • Investors may also seek to obtain a prospectus through their broker or by contacting a company's investor relations department.

Mutual funds and hedge funds must also offer potential investors a prospectus; however, here we focus on firms' prospectus prior to a corporate IPO or secondary offering.

What's in a Prospectus?

Company prospectus documents have become increasingly accessible with the advent of the internet. Most companies have a corporate website with a section labeled Investor Relations that should have available a wide range of company documentation, including quarterly and annual reports . Many investment websites may also offer links directly to a company's or fund's prospectus documents. 

The prospectus document is issued to inform investors of the potential risks involved with investing in a particular stock or mutual fund. The information provided in the prospectus also serves as a form of protection for the issuing company against any claims that information was not fully disclosed or detailed prior to the investor putting money into an investment.

Companies that wish to offer stock or bond for sale to the public must file a prospectus as part of the registration process with the SEC. Companies must file a preliminary and final prospectus. However, the SEC has specific guidelines as to what's listed in a prospectus for various securities.

The  preliminary prospectus (sometimes known as a red herring ) is the first offering document provided by a security issuer and includes most of the details of the business and transaction. However, the preliminary prospectus doesn't contain the number of shares to be issued or price information. Typically, the preliminary prospectus is used to gauge interest in the market for the security being proposed.

The final prospectus contains the complete details of the investment offering to the public. The final prospectus contains any finalized background information as well as the number of shares or certificates to be issued and the  offering price .

A prospectus will include the following information at a minimum:

  • A brief summary of the company’s background and financial information
  • The name of the company issuing the stock
  • The number of shares
  • Type of securities being offered
  • Whether an offering is public or private
  • Names of the company’s principals
  • Names of the banks or financial companies performing the underwriting

Some companies are allowed to file an abridged prospectus, which is a prospectus but contains some of the same information as the final prospectus.

The first offering is detailed by the preliminary prospectus provided by the security issuer, which outlines information about the company, its business plan and structure, and the transaction in question. The preliminary document also discloses names of the company's principals, details about the amount the underwriters are earning per sale and specifies whether the offering is public or private.

The final prospectus contains details and information about the finalized offering, including the precise number of shares or certificates being issued and the offering price of shares. 

In the case of  mutual funds , a fund prospectus contains information on and details about its objectives, proposed  investment strategies , perceived potential risks, projected performance, distribution policy, fees and expenses and fund management.

In the U.S., all companies filing with the SEC must supply their documentation to a service known as EDGAR , or the Electronic Data Gathering, Analysis and Retrieval System. The EDGAR website allows you to get all the filings of a company, including its prospectus and annual reports, which include financial statements. The EDGAR database can be searched using the company ticker symbol. EDGAR’s Companies & Other Filers Search will list a company's filings with the most recent filings shown first. Most of the filings made through EDGAR are available for download or can be viewed for free.

Canada has a similar website known as SEDAR+ , which includes SEDAR (System for Electronic Document Analysis and Retrieval), which provides company filings on the web. Like EDGAR, the SEDAR+ website provides easy access to public company documentation.

As an example, the figure below, produced from EDGAR, shows a sample prospectus for the company PNC Financial Group's offering of corporate bonds maturing in the year 2024.

We can see the following information listed:

  • Securities offered, which are senior notes that pay 3.50%
  • The maturity date of the notes, which is January 23, 2024
  • The issue date, which has yet to be determined
  • How interest will be paid and denominations to be issued
  • Use of proceeds or how the money raised will be spent, which might include financing operations, paying down debt, or buying back stock

U.S. Securities and Exchange Commission. " Updated Investor Bulletin: Investing in an IPO ."

Cornell Law School. “ Preliminary Prospectus .”

Investor.gov. " Registration Under the Securities Act of 1933 ."

Investor.gov. " Mutual Fund Prospectus ."

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Importance of a Prospectus

More articles.

  •   1. SEC Prospectus Rules
  •   2. Summary of Mutual Fund Regulations
  •   3. How to Look Up a Mutual Fund CUSIP

A prospectus is a document that companies and others file with the Securities and Exchange Commission when they are offering new shares of a security to the public. One of the most common reasons for issuing a prospectus is when a company is making an initial public offering, putting shares of stock up for sale for the first time. Mutual funds issue a prospectus at regular intervals because they routinely make new shares available.

Issuer Information

Among the most salient details in the prospectus for a new stock are the descriptions that the company offers of itself, its assets, its operations, its goals and its business plan. The prospectus also features a section known as "certain considerations," which explains any particular risk factors that could impede the success of the company and harm a shareholder's investment in its stock. Other company information includes an examination of the competition, pending legislation and the broader economy and its influence on the company. A prospectus for a stock also features a financial statement for the company and the opinion of an independent auditor about the company's financials. A bond prospectus similarly features relevant financial information about the corporation or public entity issuing the bond.

Offering Information

In addition to issuer information, a prospectus for a stock or bond offering includes information about the security itself. It describes the number of shares or bond certificates being sold in an offering, the price, the underwriter and how the security will be available for purchase. For either a stock or a bond, the prospectus should specify how the company or public entity that is selling the security will use the funds that are being raised from the sale. If the prospectus is for a stock, it will include information about its dividend policy and it will describe the different classes of stock and the voting rights for shareholders.

Mutual Fund Activity, Objectives and Leadership

A mutual fund prospectus details the performance of the fund, often including both recent quarterly results and those from previous calendar years. It also specifies the various goals for the fund and the basic overarching investment strategies that guide it. For instance, the prospectus for a fund might indicate that the fund invests in American stocks with strong long-term growth potential. This type of description gives investors an opportunity to review a fund's objectives to make sure that they match the investors' own goals. The identity of the managers who are steering the fund also often appears in the prospectus.

Mutual Fund Fees, Expenses and Guidance

A mutual fund prospectus provides investors with guidance to help with their role as shareholders. For instance, it gives investors instructions on their tax obligations related to the shares that they own, and it also details instructions on how to buy and sell shares of the fund. The prospectus provides a reliable place for investors to track down the various fees that are attached to owning shares of the fund, such as the amount of the management fee. In addition, the prospectus is a document that an investor can study in order to understand all of a fund's expenses to determine if it is operating efficiently enough for the investor's taste.

  • Forbes; Do I Have to Read a Prospectus?
  • Securities and Exchange Commission: Mutual Fund Prospectus
  • Missouri Investor Protection Center: How to Read a Prospectus

Tom Gresham is a freelance writer and public relations specialist who has been writing professionally since 1999. His articles have appeared in "The Washington Post," "Virginia Magazine," "Vermont Magazine," "Adirondack Life" and the "Southern Arts Journal," among other publications. He graduated from the University of Virginia.

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Prospectus examples to inspire your creativity

Prospectus examples to inspire your creativity

Despite it sounding like a Harry Potter spell, a prospectus is actually quite a relevant piece of educational material. They are most often used for schools and universities, but they can also be used as a legal document for many companies. So how do you design one? It’s not as complicated as you might think. So with that said, let’s go over a few prospectus examples and talk about what goes into creating one.

What is a prospectus?

We mentioned it briefly above, but it’s important to have a really good understanding of what a prospectus is before we get into the design.

A prospectus is a document created to present a given business or school. Most of the time, however, a prospectus is used by a school/university to promote their benefits to potential students and their parents.

The prospectus can exist in many forms, but the most common example is a booklet . A booklet, whether it’s digital or printed can provide a lot of space for all kinds of information.

What makes a good prospectus?

In truth, there are no rules to creating a prospectus. In fact, as you’ll see when we go through some prospectus examples, that not one is the same as another.

There are many ways in which you can design a prospectus. Overall, it really comes down to taste. That being said, take these next few prospectus examples as inspiration.

Prospectus design

Even though a prospectus is completely unique to the school or business that creates it, there are a few ground rules that you can follow to make sure it’s top-notch.

Let’s start with the basics:

Table of contents

It is absolutely vital that your prospectus contains a table of contents. Especially if you’ve managed to pump out a lot of pages.

The table of contents, like in any textbook, brochure, or really anything else aims to guide the reader. If someone, student or client, is looking for a specific piece of information, I can assure you that they don’t want to spend the next 30 minutes looking for it.

A quick table of contents right at the front can really be useful, and it really doesn’t take much effort to create. 

Principal’s welcome

Many schools and universities start their prospectus with a message from the dean or principal, welcoming all students to a new year.

It’s a very personal touch to add, and it let’s the student’s know exactly who will be leading them through the next big step in their life. It’s the perfect way to open your prospectus example.

We talked about the table of contents, so now let’s talk about the actual content in the prospectus.

This is sort of where the differences from school to school and business to business start to shine through. Depending on… well everything, the contents will be different.

As you can see, there are many different topics being discussed in the example above. It’s all in accordance with the student body, and what’s relevant for them.

But I do want to give you a little guideline still. Here are some things that you might want to consider adding to your prospectus:

  • Student schedules

If you’re creating a prospectus for a massive university, then this will be a little difficult. But, for new students, it can be very helpful to add a few class times to help them sort out their own schedule.

It doesn’t matter whether you publish a prospectus yearly, monthly, or by the semester, activities happen all the time. You could easily add a section or two about upcoming student activities to get the students excited.

The policy section could be added to prospectuses for both schools and businesses. It’s like a little rule book that anyone can carry around with them.

  • School fundraisers

There are a lot of details that go into a successful fundraiser. If it involves the whole school, that’s all the more reason to add all the school fundraising ideas for the year to the prospectus.

The right colors in any design can either make it a masterpiece or make it painful to look at. And although a prospectus isn’t exactly a Van Gough, it certainly should be appealing to look at. 

So what kind of colors should you use? Well, let’s take a look at an example.

What do you notice about this prospectus example? As far as colors go, they maintain the same color scheme throughout the entire thing. Of course, these are just a few pages of this particular prospectus, but you get the gist.

It’s important to maintain a constant color pattern throughout the prospectus. Although most people won’t notice your attention to detail, they will certainly notice if the colors don’t match.

In the same way that your prospectus should maintain the same color pallet, it should also sport colors that mean something to your school or business.

When talking about a school prospectus, it’s very important to use the colors that brand your school. In most cases, students will take pride in those colors and the fact that they represent their education.

When talking about a business prospectus, it’s important to maintain brand language, and use colors revolving around the brand.

There’s no need to go crazy with colors. Stick to what you’re familiar with through school or business, and you should be just fine.

Just like this article would be really bland without images, your prospectus would be, too. Images allow the creator to build and tell a story. Granted, there isn’t always a story to tell when it comes to a prospectus, but in many cases, the right images really help.

In the usual fashion, let’s take a look at a prospectus example to help us visualize the power of imagery.

In this image, you can see a simple and powerful image, telling the story of the students that attend Laidlaw College. To be honest, the cover is nothing fancy, but in the same sense, it’s the perfect image to begin the story.

As you can see, the image on the cover above portrays a very relaxed and calming environment. It shows students not only together, but enjoying their time. One image can set the mood for the entire story. For potential future students, a nice image like this can be quite the welcoming sight in the sea of stress they’re facing. One image can change it all.

Again with this prospectus example, you can see a simple image that shows the students of Bishop’s Hatfield Girl’s School enjoying their education. For anyone glancing at the cover, it’s a very warm sight to see the students enjoying their time.

But definitely add multiple images throughout. Use them to help guide the reader. Don’t flood your prospectus with images, just use them where they’re needed. And don’t forget to use high quality images!

We have established that the images help guide readers. But in truth, that’s only half of the story. The layout of the prospectus also helps guide the readers. 

This really isn’t a new concept, nor is it a difficult one, but it is pretty important. Your prospectus should be laid out in such a way that the reader will have an easy time navigating it. It shouldn’t be too complex, filled with obnoxious text and images, nor overloaded with bright neon colors that have nothing to do with the identity of the school or business.

So, in a way, I guess you can say that the layout is a combination of all the elements that we discussed above. The right colors, contents, and images placed in the right order makes for the perfect prospectus.

How you can make your own prospectus

Now that you know what goes into a good prospectus, it’s time to create your own. We’re going to use a combination of all the elements of the prospectus examples above to create our own unique masterpiece.

That may still seem a little daunting to you. After all, we’re not all world-class designers (mainly looking at myself). 

So what do you do in a situation like this? Cry? Pull your hair out? Well, of course not. Flipsnack is here to make sure your prospectus is as brilliant and powerful as a best-selling novel.

Let’s start with a template.

Flipsnack has a variety of prospectus examples ready for you to grab and use as a template. This one above is a great example. It’s simple, yet flashy enough to grab some attention. But don’t worry if your rival school’s color is yellow. You can change any element you see in our templates with just a few clicks.

Remember the very first image in this article? Yeah, the really cool blue and white one. Believe it or not, that is one of our templates. 

Our designers have spent quite a bit of time making sure these templates are perfect for anyone to use. Just take a look at this one:

Feeling a little bit more formal? Well we’ve got a prospectus example for that, too. This template is a little less flashy, and a lot more classy. Not that flashy is bad, it just doesn’t fit every school. 

With that said, if you like one of our templates, including the one at the beginning of this article, then just click on the image. It’ll take you right to our template page where you can browse through all of our templates.

Distribution

Now that you have your prospectus, it’s time to distribute it. When you boil it down, there are two ways to do that: print it or distribute it digitally. Now, there are quite a few ways you can accomplish both of these methods, but none are as effective as Flipsnack.

Flipsnack is by far the most inclusive and easy to use software/tool out there for creating and publishing a prospectus. With Flipsnack, you can be as detailed as you want to be, but without all the extra effort it would take to create a prospectus with another tool. You don’t need to be a designer or have any design skills at all. All you need is a Flipsnack account, and the vision of your complete prospectus.

Once you’ve got all your details sorted, the colors are perfect, and all the images are crystal clear, simply download your creation, print it, or send it around digitally.

Now, it’s up to you to create your own prospectus. Feel free to reference this article as much as you’d like. I built it as a general guide to help anyone through this process. It’s by no means all-inclusive, but it will certainly get you started.

The most important thing to remember is to use your own unique creativity. You can use a prospectus for a variety of things: grade school, highschool, universities, and colleges. Just like each application is unique, the style of the prospectus should be unique, too.

Last but not least, don’t forget to check Flipsnack out for all of your prospectus creating needs. Our simple, drag-and-drop editor will make creating a prospectus as easy as reading one. We offer a variety of helpful tools to make sure your prospectus comes out beautifully. Who knows, maybe your prospectus will be featured in an article like this in the near future.

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thanks for sugg estions, but i really loo ked forward to seeing a finished product

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Here you can see more finished products. :)

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Note: Want to skip the guide and go straight to the free templates? No problem - scroll to the bottom. Also note: This is not legal advice.

Introduction

Creating a prospectus can be daunting and it is essential for investors and companies to ensure that it is accurate and compliant with applicable laws. A prospectus is a document provided by a company which outlines the offering of a security to potential investors; containing information about the firm’s past performance, current financial standing and future plans. It provides all the necessary details for investors to make an informed decision about whether or not to invest in said company, as well as safeguarding their investment by ensuring that the business is abiding by relevant regulations.

The prospectus also serves another purpose - to attract investors. By providing thorough information, it builds trust between them and the business while creating confidence in its legitimacy. This can be particularly beneficial for start-up organisations who may not have an established track record yet. For companies, having this document demonstrates their commitment to transparency and accountability which both increases credibility with stakeholders as well as establishing trust amongst them.

At Genie AI, we are here to help you make this process easier - providing detailed step-by-step guidance on how to create a secure legal template library without paying a lawyer fee along with access our free template library today! Our millions of datapoints teach AI what constitutes market-standard language for such documents; so whether you’re an experienced attorney or just starting out in writing your first draft – we’ve got you covered! With us, you can avoid any legal pitfalls whilst ensuring that you protect both yourself and your investors from potential risks down the line; no matter what stage your company is at. Read on below for more advice from Genie AI on how best to create an effective prospectus today!

Definitions (feel free to skip)

Executive Summary - A summary of the main points of a document that is typically located at the beginning of the document. Prospectus - A document that provides detailed information about an investment opportunity, including an overview of the investment, the management team, and the financial plan. Target Audience - The specific group of people that a document or message is intended for.

Understanding the Basics of Investment Prospectus Writing

Researching common prospectus formats, gaining an understanding of the basics of prospectus writing, defining your audience and goals, identifying who will be reading the prospectus, outlining the primary goal of the document, developing an outline and writing plan, brainstorming key points to include, organizing the points into a logical outline, establishing a timeline for writing the prospectus, crafting an effective executive summary, summarizing the main points of the document, highlighting the investment opportunity and its benefits, outlining the management team and operating structure, presenting the investment opportunity and its benefits, describing the investment opportunity in detail, explaining the potential benefits of the investment, presenting potential returns and roi, analyzing the market and the competition, researching the relevant market, identifying the competition, explaining the potential advantages of the investment, describing the management team, outlining the qualifications of key team members, describing the skills and experience of the management team, explaining the operating structure and financial plan, presenting the operating structure of the investment, outlining the financial plan for the investment, explaining the sources of funding, outlining the risk factors, identifying potential risks associated with the investment, explaining the strategies for mitigating those risks, finalizing and distributing the prospectus, proofreading and editing the document, formatting the document for printing or digital distribution, distributing the prospectus to the intended audience, get started.

  • Learn about the purpose of an investment prospectus
  • Review the SEC requirements for writing a prospectus
  • Familiarize yourself with the key components of a prospectus, such as risks, fees, and performance
  • Understand who the intended audience is for the prospectus
  • Research different types of prospectus writing

Once you have a good understanding of the basics of investment prospectus writing, you can move on to the next step in the guide.

  • Gather samples of investment prospectuses from various sources such as the SEC, investment banks, and other institutions
  • Read through the samples to get an idea of the common format and structure
  • Note the language and tone used in the prospectuses
  • Identify the common topics and sections included in the prospectus
  • Once you have a thorough understanding of the common prospectus formats, you can move on to the next step in the guide.
  • Read up on the basics of investment prospectus writing, such as what should be included, how to structure it and what the various sections are
  • Understand the purpose of a prospectus, which is to provide potential investors with information about a company’s financial situation and future plans
  • Familiarize yourself with the Securities and Exchange Commission’s rules and regulations for creating a prospectus
  • Research and analyze the competition to determine what other companies in the same industry are doing and how to make your prospectus stand out
  • Know the different types of prospectuses (e.g. private placement memorandum, offering circular, private-placement letter)

You’ll know you’ve completed this step when you have a good understanding of the basics of prospectus writing, the purpose of a prospectus, SEC regulations, the competition, and the different types of prospectuses.

  • Identify who is likely to read the prospectus (e.g. potential investors, investment analysts, etc.)
  • Consider what the primary goals of the prospectus are (e.g. to inform, to persuade, etc.)
  • Make sure the language used in the prospectus is suitable for the audience
  • Tailor the content of the prospectus to the target audience
  • Define the key message that you want to communicate to the reader
  • When you are satisfied that the prospectus is written for the intended audience, with the goals in mind, you can move on to the next step.
  • Identify the specific individuals or organizations who will be reading the prospectus.
  • Research the background and interests of the readers to ensure that the correct tone and level of detail is used.
  • Decide whether the prospectus should be tailored for each reader or sent out in a single version.
  • When you have identified the readers and their needs, you can move on to the next step of outlining the primary goal of the document.
  • Determine the primary goal of the document and state it clearly
  • Outline the supporting information that will be included in the document
  • Ensure the primary goal is clearly communicated and that the information is relevant and useful to the reader
  • Review the outline and verify that it accurately reflects the goal of the document
  • When the outline is finalized, the next step can begin
  • Create a timeline for when each section needs to be completed
  • Develop an outline for the document, including a list of topics to be covered in each section
  • Consider the target audience when outlining the document
  • Make a list of the information and research materials you will need to complete each section of the document
  • Outline the structure of the document - what information will go at the beginning, in the middle, and at the end
  • When you have an outline and writing plan in place, you will have a solid foundation for creating your investment prospectus
  • Identify the purpose of the investment prospectus
  • Look at the investor’s goals and needs
  • Research the target market
  • Identify key points of the investment
  • Determine what financial data needs to be included
  • Determine other information that should be included in the prospectus
  • Research comparable investments in the same sector
  • When you have a list of key points to include in the prospectus, check it off your list and move on to the next step.
  • Create an outline that includes all the key points you brainstormed
  • Decide on a flow that works best for the prospectus
  • Group related points together in the outline
  • Prioritize the points and determine which should be included in the introduction, body, and conclusion
  • Check that the outline is organized in a logical and clear way
  • When the outline is complete, you can move on to the next step of writing the prospectus.
  • Gather the necessary information from the team and potential investors
  • Decide on a timeline for the project and document it
  • Set a schedule for each step of the process
  • Assign tasks to project members and allocate sufficient time for each task
  • Determine when the prospectus will be completed and when it will be shared with potential investors
  • Track project progress to ensure completion on time

How you’ll know when you can check this off your list and move on to the next step:

  • When all tasks associated with the prospectus are complete and the timeline is properly documented.
  • Define the target audience of the executive summary
  • Consider what information should be included in the summary
  • Keep the summary concise and direct
  • Highlight the most important points of the prospectus
  • Focus on the benefits of investing
  • Describe the company and its products or services
  • Explain the unique value proposition of the company
  • Include any competitive advantages
  • Summarize the key financial and operational objectives
  • Provide a conclusion that ties all the elements together

When you can check this off your list and move on to the next step:

  • When you have incorporated all the key elements of an executive summary into your prospectus.
  • Understand the purpose of the document and outline the main points you want to include
  • Create a summary of the main points that is clear and concise
  • Keep the summary short and straightforward
  • Check for any information that is essential to understanding the document and make sure to include it in the summary
  • Check for accuracy, clarity, and relevance
  • Once you are satisfied with the summary, you can consider this step complete and move on to the next step.
  • Describe the project in detail and explain why it’s a good investment opportunity
  • Highlight the main points of the project, such as expected returns, potential risks, timeline, and any other relevant information
  • Explain how the project will benefit investors, such as tax incentives, potential for growth, etc
  • Include any other relevant details that make this project a viable option for investors
  • You can check this off your list when you have all the necessary information included in the document and it is written in a clear and concise way.
  • Create an executive summary of the investment opportunity and its benefits
  • Identify the management team and what roles they will play
  • Explain the structure of the business and how it will operate
  • Detail the experience and qualifications of the management team
  • Outline the organizational structure and how it will be managed
  • Describe any relevant industry experience of the management team
  • Provide a timeline of the activities needed to launch the business

Once you have outlined the management team and operating structure, you can move on to the next step in the guide.

  • Provide a brief overview of the investment opportunity and the benefits it offers
  • Explain why this investment opportunity is attractive and why investors should pursue it
  • Identify the potential returns of the investment, including any potential risks
  • Describe the competitive advantage the investment has over other opportunities
  • Summarize the key points of the investment opportunity to create a compelling case

When you have provided an overview of the investment opportunity and its benefits, you will know you can check this step off your list and move on to the next step.

  • Research the company, including its history, finances, management, competitive landscape, and other relevant factors
  • Outline the potential for returns and risks associated with the investment
  • Describe the investment opportunity in detail, including an overview of the company, its potential markets, products or services, and its competitive advantage
  • Provide an analysis of the potential for return on investment
  • Explain the potential risks associated with the investment

When this step is complete, you should have a clear and comprehensive description of the investment opportunity and its potential risks and rewards.

  • Outline the long-term benefits of the investment, including how it is likely to increase in value over time
  • Discuss the different types of returns that investors can expect to receive
  • Explain the tax benefits associated with the investment, if any
  • Describe the potential social, environmental, or economic benefits of the investment
  • Highlight any other potential benefits that the investment could bring

You will know you are finished with this step when you have included all potential benefits of the investment in your prospectus.

  • Gather all of the necessary information about the investment including past performance, current market trends, and future projections
  • Determine the expected return on investment (ROI) for the investment and present it in the prospectus
  • Calculate the potential risk associated with the investment
  • Present a realistic timeline for when the investor can expect to see returns
  • Explain the potential tax implications and the investor’s responsibility to pay taxes

When you have completed this step, you will have presented realistic potential returns and ROI, as well as the associated risks and timeline.

  • Research the current market trends for the investment category, as well as competitors in the space
  • Evaluate the strengths and weaknesses of the competition in relation to the investment you are offering
  • Research the overall environment of the target market you have identified, including any external factors that may influence the success of the investment
  • Use surveys, focus groups, interviews, etc. to gather insights on how the market perceives the investment you are offering
  • Analyze the data you have collected to identify any potential opportunities or threats to the success of the investment
  • When you have completed your analysis, you should have a good understanding of the current market situation and how your investment will fit into it.
  • Gather data on the industry, such as market size, growth rate, potential customers, and potential competitors
  • Research the current competitive landscape and identify possible opportunities or threats
  • Analyze the industry and market to determine any potential trends
  • Identify any external factors that could influence the market
  • When you have a thorough understanding of the industry and its dynamics, you will be ready to move on to the next step.
  • Research the competition in the target market to identify their strengths, weaknesses, and potential threats
  • Make note of any potential obstacles or challenges posed by the competition
  • Analyze the strategies of the competition to identify any potential opportunities
  • Note any industry trends, pricing strategies, and customer service approaches of the competition
  • When you’ve identified the competition, their strengths, weaknesses, opportunities, and threats, as well as industry trends, pricing strategies, and customer service approaches, you can check this step off your list and move on to the next step.
  • List the potential advantages of the investment in bullet point format
  • Outline the potential returns of the investment
  • Explain why investors should consider this investment
  • Provide a summary of the potential benefits of the investment
  • Once you have listed and explained the potential advantages, you can check this step off your list and move on to the next step: Describing the Management Team.
  • List the qualifications of the executive team members
  • Identify any key personnel that are not part of the executive team, but who are integral to the success of the project
  • Describe the experience of the executive team members related to the business being pursued
  • Demonstrate the ability of the executive team to successfully manage the business being pursued
  • Outline any other relevant qualifications that the executive team members possess
  • Once you have outlined the qualifications of the executive team, you can move on to the next step of outlining the qualifications of key team members.
  • Gather the resumes of each key team member.
  • Outline the qualifications of each key team member, such as their education, licenses, and experience in the investment industry.
  • Include any other qualifications that the team members have that may be pertinent to the investment prospectus.
  • Use an easily readable format and include relevant information such as titles, years of experience, and specialties.

When you can check this off your list:

  • When all of the qualifications of each key team member have been outlined in the investment prospectus.
  • Research the qualifications and experience of the management team
  • Describe each team member’s role in the company and their experience in the industry
  • Outline how each team member’s skills and experience will help the company achieve its goals
  • Describe the qualifications and experience of any consultants used by the company
  • When you are finished, you can proceed to the next step of explaining the operating structure and financial plan
  • Outline the operating structure of the investment, including roles and responsibilities
  • Explain the financial plan, including revenue streams and budgeting
  • Include any financial projections and forecasts
  • Describe any risks associated with the investment
  • Explain how you plan to measure and monitor performance
  • Include any information about capital requirements or investors

Once you have outlined the operating structure, explained the financial plan and included any financial projections and forecasts, you can move on to the next step.

  • Outline the strategy for the investment
  • Describe the operational structure of the investment
  • Explain the roles and responsibilities of the different parties involved
  • Include any relevant documents and information to support the operating structure
  • Assess any risks associated with this structure
  • Include any relevant legal documents associated with the structure

Once all the information is gathered, reviewed and organized, you can mark this step as complete and move on to the next step - outlining the financial plan for the investment.

  • Research historical financial data of current investments
  • Identify any potential risks associated with an investment
  • Estimate expected return on investment
  • Estimate liquidity and cash flow of the investment
  • Estimate the investment’s future performance
  • Calculate the return on equity
  • Prepare a financial plan

When you have completed the above steps, you can check it off your list and move on to the next step.

  • List the sources of funding, such as debt, equity, grants, and lines of credit.
  • Identify the terms of the different sources of funding, such as the interest rate, payment schedule, and any collateral required.
  • Summarize the sources of funding and the terms associated with them in the investment prospectus.
  • Check whether you have provided a complete overview of the sources of funding for the investment when you finish summarizing them.
  • Identify all of the potential risks associated with the investment, such as market volatility, liquidity, or other external factors
  • List the risks and potential consequences for the investor
  • Provide any details or information about the risks that could be helpful in understanding them
  • Outline any strategies that can be used to mitigate or lessen the risks
  • When all risks have been identified and outlined, you can move on to the next step in writing the investment prospectus – identifying potential risks associated with the investment.
  • Analyze the investment from both an internal and external viewpoint to identify potential risks
  • Research and analyze the industry, market, and regional environment where the investment is located
  • Review existing and future competition to identify potential risk areas
  • Evaluate potential legal and regulatory risks
  • Consider the potential operational and financial risks
  • Make sure to take a holistic view of the investment, considering all potential risks
  • When you have identified and analyzed all potential risks, you can move on to the next step of outlining the risk factors.
  • Research the investment and analyze the potential risks associated with it
  • Develop strategies to minimize the risks, such as diversification or hedging
  • Outline the strategies in the prospectus
  • Provide a brief summary of each strategy
  • Include any supporting documents if necessary
  • Once you have outlined the strategies and their respective summaries, you can move on to the next step.
  • Gather all materials needed for the prospectus, such as the executive summary, financial information, and other information that was gathered from previous steps.
  • Create a cover page for the prospectus that includes the name of the company and key individuals involved.
  • Gather the contact information for all recipients of the prospectus.
  • Distribute the prospectus electronically or via physical mail.
  • Follow up with the recipients to ensure they received the prospectus and to answer any questions they have.

When you have completed the above steps, you will have finalized and distributed the prospectus. You can then check this off your list and move on to the next step.

  • Read through the prospectus a few times to check for any typos, grammar errors, or formatting issues.
  • Have someone else read the prospectus to give a fresh set of eyes, and to catch any errors you may have missed.
  • Make any necessary edits or changes to the prospectus.
  • When the prospectus is free of any errors and has been approved, you can check this step off your list and move on to formatting the document for printing or digital distribution.
  • Select a paper size and format that best suits your document
  • Choose a font type and font size that is appropriate for the document
  • Adjust the margins, page layout, and page numbering
  • Ensure that all images, charts, and tables are properly inserted and sized
  • Insert headers and footers if desired
  • Preview the document to ensure that it looks as intended

Once you have proofread and formatted the document, you can be confident that it is ready for printing or digital distribution.

  • Gather contact information for potential investors
  • Determine the best method for distributing the prospectus (email, mail, etc.)
  • Compose the email and/or letter to accompany the prospectus
  • Send the prospectus to the intended audience
  • Track responses and follow up as needed
  • When all of the intended recipients have received the prospectus and any accompanying materials.

Example dispute

Lawsuits referencing prospectus.

  • A plaintiff may raise a lawsuit against a company referencing a prospectus if the prospectus contains inaccurate or misleading information that results in the plaintiff suffering financial losses.
  • The plaintiff must be able to prove that the company was aware of the false or misleading information in the prospectus and that it was material to the decision of the plaintiff to purchase the security.
  • Civil liability may arise if the company did not properly update the prospectus with any material changes after the problems were identified by the company.
  • If the lawsuit is successful, the plaintiff may be able to recover their losses in full, plus interest, and any punitive damages awarded by the court.
  • In order to win the case, the plaintiff must show that the false or misleading information in the prospectus was the direct cause of their financial losses.

Templates available (free to use)

Aim Listing Verification Notes Admission Documents Or Prospectus Consent Letter From Mentioned Parties Prospectus Regulation Rules Forward Looking Statements Ipo Prospectus Legend Free Writing Prospectus For Registered Equity Offerings Free Writing Prospectus For When You Upsize Or Downsize Your Ipo Memo On Directors Responsibilities Regarding A Prospectus Secondary Offer Prospectus Content Outline

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Understanding Prospectus in Company Law: An Informative Guide

Author : Shashwat Srivastava

Updated On : February 9, 2024

Reader's Digest: Discover the secrets of corporate governance and financial opportunities in the fascinating world of Prospectus in Company Law! Unravel the complexities and dive into the core of company structures. Don't miss this chance to broaden your understanding and unlock new perspectives!

Welcome to the world of Prospectus in Company Law !

In this guide, we'll explore this important legal document that protects investors and promotes transparency in business.

A prospectus is a comprehensive disclosure document that provides crucial information about a company and its securities. It ensures transparency by obligating companies to reveal their financial health, objectives, risks, management, and more.

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Under the Companies Act, Section 26, companies are required to issue a prospectus to maintain fairness in the investment landscape. It empowers investors to make informed decisions and builds trust between companies and investors. Let's dive into the details of prospectus in company law!

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Legal Requirements for a Prospectus 📝

When companies decide to offer securities to the public, they must follow strict rules and regulations set by the law. These regulations, outlined in the Companies Act 📜, Section 26, lay down the legal obligation for companies to issue a prospectus. The goal behind this requirement is simple: to ensure potential investors receive all the necessary and accurate information about the company and its offerings. 😉💼

The Companies Act's Section 26 is like a guidebook for companies, telling them they must create a prospectus when they want to offer securities to the public. This helps maintain transparency and gives investors a clear picture of the company's financial health, objectives, risks, and the types of securities being offered. 📃💰

However, it's important to know that there are exceptions and exemptions mentioned in Section 32 of the Companies Act. These exceptions give companies some flexibility in certain situations, relieving them from the requirement of issuing a prospectus. For instance, when companies offer securities to a restricted group of sophisticated investors or through private placements, they may not need to prepare a full-fledged prospectus. This way, they can raise funds without compromising investor protection, using alternative means to provide necessary information. 🤝🔒

By having these legal provisions in place, the law finds a balance between the need for transparency and the practicality of fundraising for companies. It ensures that potential investors are protected while allowing companies to attract investments and grow their businesses. 💪💼

Companies need to comply with these legal requirements for a prospectus to maintain their reputation and earn the trust of investors. It's crucial for them to understand and follow the law, providing accurate and complete information in the prospectus. By doing so, companies can establish investor confidence, attract potential investors, and make the investment process smoother. 📋✅

Remember, these legal requirements exist to protect investors and promote transparency in the corporate world. Companies have a responsibility to fulfill these obligations, not just because they are legally required, but also because it's the right thing to do when raising capital from the public. By embracing these requirements, companies contribute to a fair and trustworthy investment environment. 👥💡💰

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Contents of a Prospectus - What's Inside? 📋

When it comes to understanding a company and the investment opportunity it presents, a prospectus is your key. It's like a backstage pass that takes you behind the scenes, revealing all the important details. So, let's open this treasure trove and see what you'll find inside! 🏢📚

Getting to Know the Company: Who Are They and What Do They Want? 🏢📚

The prospectus starts by introducing you to the company itself. You'll learn about its history, how it came to be, and what it aims to achieve. This section gives you a solid foundation to understand the company's background and aspirations. It's like meeting the company in person and getting to know them better! 🤝🌟

Exploring Investment Opportunities: What's on Offer? 💼💰

Now, let's dive into the heart of the matter: the investment options. The prospectus provides detailed insights into the securities available, such as equity shares, debentures, and other financial instruments. It lays out the terms, conditions, and benefits of each investment, helping you evaluate which option suits you best. Think of it as a menu of investment choices, waiting for you to pick your favorite dish! 🍽️💼💰

Peeking into the Company's Finances: Are They in Good Shape? 📊💸

Financial statements are like the X-ray of a company's financial health, and the prospectus unveils them for you. You'll find audited reports, balance sheets, income statements, and other financial information. These statements give you a clear view of the company's financial performance, stability, and growth potential. It's like having a sneak peek into the company's bank account! 💰📊💼

Understanding the Risks: Navigating the Ups and Downs ⚠️🤔

Investing always comes with risks, and the prospectus doesn't shy away from addressing them. This section highlights the potential pitfalls and uncertainties associated with the investment. From market fluctuations to industry-specific challenges, it gives you a heads-up on what to watch out for. It's like having a trusty compass to navigate the investment journey! 🧭⚠️🌍

Meet the Dream Team: Who's Steering the Ship? 👥📜

Knowing who's in charge is crucial, and the prospectus introduces you to the company's management and board of directors. You'll get comprehensive details about their qualifications, experience, and expertise. It's like meeting the captain and crew of a ship before you decide to come aboard. You want to be confident in their abilities to navigate stormy seas! ⛵👥🔍

Putting Money to Good Use: Where Will Your Investment Go? 💡💵

Transparency is key, and the prospectus sheds light on how the company plans to use the funds raised from the investment. Whether it's for expansion, research and development, or paying off debts, you'll know where your money is headed. It's like following the trail of your investment to see the impact it will make. 💼💡💵

So, a prospectus in company law is your guidebook to understanding the company, evaluating investment options, assessing financials, being aware of risks, meeting the key players, and knowing how your investment will be utilized. Armed with this knowledge, you can make informed decisions and embark on your investment journey with confidence! 

Preparation and Approval of Prospectus 🖋️✅

When it comes to preparing and approving a prospectus in company law, meticulous attention to detail and collaboration with auditors, legal advisors, and other professionals are of utmost importance. The primary goal is to ensure accuracy, compliance with legal requirements, and instill investor confidence. Let's dive into the process and legal provisions involved.

In accordance with Section 26(3) of the Companies Act, every person named as a director or proposed director of the company must sign the prospectus. This requirement ensures accountability and verifies the authenticity of the information provided. 🖊️🔍

During the preparation stage, the company's management plays a pivotal role. They work closely with professionals to gather relevant information, compile financial statements, and provide a comprehensive overview of the company's operations and offerings. It is crucial to maintain accuracy, as any misleading statement or omission of material facts can have severe consequences.

Disclosure Requirements and Investor Protection 🔒💡

The prospectus serves as a critical tool for protecting investors' interests and fostering trust in the capital market. Accurate and complete disclosure is paramount to ensure transparency and enable investors to make informed decisions. Section 35A of the Companies Act explicitly addresses civil liability for misstatements in prospectuses, emphasizing the legal consequences of providing false or misleading information.

Investors have the right to legal remedies, including compensation, if they suffer financial loss due to reliance on such false or misleading information. To mitigate legal risks, it is crucial for companies to maintain the highest level of transparency and provide truthful disclosures in their prospectuses. This not only protects investors but also upholds the integrity of the market. 👥💼⚖️

Prospectus Formats and Distribution 📤🌐

Prospectuses come in various formats, each serving a specific purpose. A base prospectus provides essential information about the company and its offerings, while a red herring prospectus includes preliminary details that may be subject to change. The final prospectus, as the name suggests, encompasses all the necessary and finalized information for potential investors.

With the advent of technological advancements, the mode of prospectus distribution has evolved. Companies now have the option to distribute prospectuses through electronic means, physical copies, and websites. This allows for broader accessibility and easier dissemination of information. However, it is crucial to adhere to the timelines set by regulatory authorities for filing and distributing prospectuses. Compliance with these timelines ensures that potential investors have ample time to review the document and make informed investment decisions. 🗂️📩📅

Prospectus and Initial Public Offerings (IPOs) 🚀📈

When a company decides to go public through an Initial Public Offering (IPO), the prospectus takes center stage in the offering process. It serves as a crucial document that provides potential investors with a comprehensive understanding of the company's financial health, growth prospects, and associated risk factors. 📜💼💰

Prospective investors recognize the prospectus as a valuable resource, meticulously analyzing its contents to make informed investment decisions. By carefully examining the prospectus, investors gain insights into the company's financial statements, business model, competitive landscape, and future plans. This knowledge empowers them to assess the investment's potential and determine whether it aligns with their investment objectives and risk appetite. 🔎💡💼

As an investor, it is of utmost importance to read the prospectus carefully, paying close attention to the disclosed information. The prospectus acts as a gateway to understanding the company's operations, financial performance, and strategic direction. However, decoding the prospectus can sometimes be a complex task, as it often contains technical and legal jargon. In such cases, seeking guidance from financial advisors or professionals well-versed in prospectus analysis can provide invaluable insights and ensure a thorough evaluation. 🤔👥🌐

Prospectus Liability and Enforcement ⚖️🔍

In the realm of prospectus regulations, both civil and criminal liabilities are imposed on individuals responsible for false statements or omissions in the prospectus. The Companies Act, Section 35A, holds such individuals accountable for any misleading or inaccurate information presented in the prospectus. These liabilities serve as a deterrent, emphasizing the need for transparency and honesty in the disclosure process. 📜⚖️

Regulatory authorities, such as the Securities and Exchange Commission, play a crucial role in enforcing compliance with prospectus regulations. They have the power to scrutinize prospectuses, conduct investigations, and take legal action against those found in violation. These enforcement measures aim to maintain market integrity, protect investors' interests, and foster trust in the capital market. Recent cases and precedents highlight the seriousness with which prospectus liability is treated, emphasizing the consequences of non-compliance. 🔒🔍🕵️‍♂️

Prospectus Regulation Reforms 🔄🌟

As the corporate landscape evolves, so do the prospectus regulations. Regulatory authorities continuously assess and revise these regulations to adapt to changing market dynamics, enhance investor protection, and streamline processes. Recent prospectus regulation reforms have sought to address emerging challenges, promote transparency, and align regulations with the evolving needs of companies and investors. 📈🔄💼

Staying updated on these regulatory changes is vital for companies and investors alike. By keeping abreast of the latest reforms, they can ensure compliance with the revised requirements and seize potential opportunities arising from these changes. Investors benefit from the enhanced transparency and protection provided by the reformed regulations, while companies can navigate the offering process more efficiently. Understanding and embracing these reforms enables market participants to effectively navigate the prospectus landscape and contribute to a thriving and trustworthy investment ecosystem. 🌟💪📚

Conclusion 

The prospectus in company law is a vital instrument that promotes transparency, protects investors, and maintains the integrity of the capital market.

Companies must understand their obligations, adhere to legal provisions, and provide accurate and complete disclosures to foster trust among investors.

Investors, on the other hand, should diligently review prospectuses and seek professional advice before making investment decisions.

With robust prospectus regulations and compliance, we can collectively build a thriving investment ecosystem. 💪💼💰

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Frequently Asked Questions

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company prospectus benefits

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Can a prospectus be misleading?

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February 9, 2024

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Prospectus of a Company: Meaning, Types and Uses

What is a prospectus.

A Prospectus is a final document that is required by and filed with the Securities and Exchange Commission (SEC) . It provides details about an investment offering to the public and is filed for offerings of stocks, bonds, and mutual funds. The Prospectus helps investors to make more informed decisions on investment because it contains a host of relevant information about the investment or security. All forms of the prospectus are in existence to attract or inform clients, members, buyers, or investors.

Geeky Takeaways:

  • A Prospectus is a legal document describing a company’s securities that have been put on sale.
  • It generally discloses the company’s operations along with the purpose of the securities being offered.

Types of Prospectus

Table of Content

Prospectus: An Overview

Types of prospectus, why is prospectus useful for investors, frequently asked questions (faqs).

Companies that wish to offer bonds or stocks for sale to the public should file a prospectus with the Securities and Exchange Commission (SEC) as part of the registration process. Companies have to file a preliminary and final prospectus, and the SEC has certain specific guidelines as to what is listed in the prospectus for various securities.

The Preliminary Prospectus is a first offering document that is provided by a security issuer and includes most of the details of the business and transaction. However, it does not contain the number of shares to be issued or price information.

The Final Prospectus , on the other hand, contains the entire detail of the investment offering to the public. The final prospectus includes any final background information as well as the number of shares or certificates to be issued and the offering price.

A prospectus includes the following listed information:

  • A brief summary of the background of the company and financial information.
  • The name of the company issuing the stock.
  • The total number of shares.
  • The type of securities being offered.
  • Whether an offering is private or public.
  • Name of the company’s principle.
  • Name of the banks or financial companies performing the underwriting.

Some companies are also allowed to file an abridged prospectus, which is a document that contains information that is the same as that of the final prospectus.

Another reason behind issuing prospectus is to inform investors of the risks involved with investing in the fund or security. Although, a company might be raising capital by issuing bond or stock, investors must study the financial statements of the company. This ensures the company is financially viable enough to fulfill its commitments. The information on the prospectus also guards the issuing company against claims that information is not fully disclosed.

As per the provisions of the Companies Act, 2013, there are majorly four types of prospectus:

1. Deemed Prospectus: Section 25(1) of the Companies Act, 2013 mentions Deemed Prospectus. When a company allows to allot any securities of a company , the document is considered to be a Deemed Prospectus through which the offer is made to the investors.

2. Red Herring Prospectus: It is the prospectus that does not contain all the information regarding the prices of securities offered and the number of securities that are to be issued. As per the provisions of the act, the firm must issue this prospectus to the registrar at least three times before the opening of the offer and the subscription list.

3. Shelf Prospectus: It is stated under Section 31 of the Companies Act, 2013 and is issued when a company or any public financial institution offer one or more securities to the public. A company must provide a period of validity of the prospectus, which shall not be more than one year. An information memorandum must be provided by the organization when filing the Shelf Prospectus.

4. Abridged Prospectus: It is a kind of memorandum that contains all the salient features of the prospectus as specified by SEBI (Securities and Exchange Board of India) . Abridged Prospectus includes all the information in brief, which provides a summary to the investor to make further decisions.

A Prospectus is a legal document that is submitted to the concerned authority and contains information for the public regarding an investment offering. It is very useful for investors since they learn about the risks associated with buying securities or funds. Generally, risks are briefly mentioned in the prospectus at the early stage and described in more detail later. When the company is acquiring funds by issuing stocks or bonds, it is the investor’s duty to review the company’s financial statements to make sure it is financially stable enough to uphold its obligations.

A Prospectus is a document that is legal and formal in nature and is issued by a body corporate which acts to invite offers from the public for subscription or purchase of any securities. It is mandatory for every public company to issue the prospectus for its shares or debentures but the same is not required in the case of a private company.

So, a Prospectus plays a vital role for any public company and it must be laid down under the provisions of the Companies Act, 2013.

1. What is a Prospectus?

A Prospectus is a final document that is required by and filed with the Securities and Exchange Commission (SEC). It provides details about an investment offering to the public and is filed for offerings of stocks, bonds and mutual funds.

2. What are the two kinds of prospectus that companies have to file?

Companies have to file a preliminary and final prospectus, and the SEC has certain specific guidelines as to what’s listed in the prospectus for various securities.

3. What are the four major types of Prospectus as per the provisions of the Companies Act, 2013?

As per the provisions of the Companies Act, 2013, there are majorly four types of prospectus: Deemed Prospectus, Red Herring Prospectus, Shelf Prospectus and Abridged Prospectus.

4. Why is Prospectus useful for investors?

A prospectus is very useful for investors since they learn about the risks associated with buying securities or funds. When the company is acquiring funds by issuing stocks or bonds, it is the investor’s duty to review the company’s financial statements to make sure it is financially stable enough to uphold its obligations.

5. Is Prospectus mandatory in both Public as well as Private Companies?

It is mandatory for every public company to issue a prospectus for its shares or debentures, but the same is not required in the case of a private company. 

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All About Prospectus of Company

Introduction.

The prospectus is an important document, related to the formation of the Company. A prospectus is a legal document through which the Public Company raises funds after its incorporation. Promoters play an important role in the making of the prospectus. The prospectus is a notice, document, circular, advertisement through which a public company appeals for a fund from the public. Under the Companies Act [1] , the right to issue a prospectus is only given to the Public Companies with share capitals. Thus, a Public Company, but not a Private Company is entitled by issuing a prospectus, to invite application for its shares or debentures. The fund raises from existing shareholders through notice, document, etc. are not termed as a prospectus. The prospectus includes various information’s regarding the company which issues a prospectus such as financial performance of the Company, directors, promoters, and the sector in which the company deals.

Definition of Prospectus

The term Prospectus [2] is defined as “any document described or issued as a prospectus and includes a red- hearing prospectus [3] or shelf prospectus [4] or any notice, circular, advertisement or other document inviting offers from the public for subscription or purchase of any securities of a body corporate”. It is a legal document that is required to file with the Securities and Exchange Commission (SEC), which provides details about the investment to the public.  The prospectus contains detailed information of the Board of Directors, Company Secretary, company’s management, capital structure, financial performance, recent projects of a company, and other related information.

Is Prospectus a written document or oral?

Whether a television advertisement and visual clips which give all the required details of the company and also give the information regarding new shares and debentures are termed as Prospectus?

No, the Prospectus shall not be oral. According to Section 25 of the Companies Act, the Prospectus must be in writing because it is a document.

Types of Prospectus

According to the provisions of the Companies Act 2013, the Public Company can issue four types of Prospectus.

1. Deemed Prospectus:

As per the provision of Section 25 of Companies Act, 2013, Deemed Prospectus is a document that offers the sale of securities to the public. In deemed prospectus, the company issues any securities of the company to another person often called Issue House, who make a further offer of sale of these shares to the public by advertisements.

2. Red Hearing Prospectus:

According to the provision of Section 32 of the Companies Act, 2013, a Red Hearing Prospectus is a prospectus with a view issued by a Public Company may before issuing an actual prospectus (Section 32 (1)) to explore the demand for securities and price at which securities may be offered.

It is a prospectus that does not include complete particulars of the quantum or price of the securities included therein.

According to Section 32 (3), the red herring prospectus shall file it with the registrar at least 3 days before the opening of the subscription list.

Section 32 (3) states that, in case of any variation between red hearing and actual prospectus, then in the Actual prospectus the variation shall be highlighted and the heading shall be “ As Variations ”.

3. Shelf Prospectus:

According to Section 31 of the Companies Act, 2013, Shelf Prospectus is a prospectus in respect of which the securities or the class of securities included therein are issued for subscription in 1 or more issues over a certain period without the issues of a further prospectus. This prospectus may be issued by any class or classes of companies at the Securities & Exchange Board of India (SEBI) may provide by regulations on this behalf.

The validity period of the shelf prospectus is not more than one year. For the subsequent offer of securities with the given period, no further issuance of the prospectus is required. In the case of Shelf Prospectus, the company shall require to file an Information Memorandum with the registrar before making a subsequent offer of securities.

4. Abridged Prospectus:

Section 33 of the Companies Act, 2013 states that a memorandum containing such salient features of a Prospectus as may be specified by the SEBI by making regulations on this behalf, and also this abridged prospectus is attached to every form of application issued for the purchase of any securities. If a company makes any default regarding the attachment of the abridged prospectus, then they shall be liable to a penalty of ₹50000 for each default.

The prospectus is an offer or Invitation to Offer?

The Prospectus has issued to the public at large, so the question arises that the prospectus is whether a general offer to the public? No, a prospectus is not an offer but merely it is an invitation to offer according to the Indian Contract Act. The prospectus is a constructed document that shall be issued to the public as an invitation for the subscription of shares.

When the new company is incorporated, they issue a prospectus through which the public gets to know about the existence of the Company. The company tries to convince the public that they give the best opportunity to them for their investment. If the public is convinced then they give an offer through the application for the purchase of shares and debentures.

Prospectus — invitation of offer

Application for purchase of shares — Offer

Allotment of Shares — Acceptance

After acceptance, the contract is binding to the Companies and the shareholders.

A Company gets 120 days for this whole process after the prospectus was issued. But if the company fails to do so i.e. obtain a minimum subscription from the public with a specified period, then the amount they received from the public is returned to them. Also, the company didn’t get the “ Certificate of Commencement of Business ” because the public doesn’t rely upon or interested in this company.

Who needs a prospectus?

The potential investors need a prospectus to evaluate the value of the offered public securities. Prospectus also states the company history, financial performance, company’s projects, capital structure of the company, potential growth of a company, etc. In other words, a prospectus discloses material facts of the company in front of the potential users which helps them to understand the risk factor on their investment.

When Prospectus is not required to be issued?

Under Section 26 of the Companies Act, 2013, the following state of affairs where the prospectus need not be issued-

1. When the shares or debentures are not offered to the public.

2. When shares and debentures are to be allotted to the existing shareholders or debenture Holders with or without a right to renounce (reject).

E.g. when shares are placed privately to less than 50 persons (private placement means less than 50 (i.e. 49), if 50 or more then considered as a public issue).

3. When shares and debentures are to be allotted are similar (uniform in nature) to the current shares and debentures (already issued shares and debentures), then there is no requirement to issue a new prospectus.

4. When not permissible by law (i.e. a Private Company is not required to issue prospectus (Section 2 (35)).

5. Where invitation to the public for subscription to the shares or debentures of a company is made in the form of Newspaper Advertisement (Section 30).

6. When an invitation to such person who has an underwriting contract for shares and debentures.

Content incorporated in Prospectus

The Prospectus has issued on the behalf of the company. Section 26 of the Companies Act, 2013, read with Rule 3 of the Companies (Prospectus and Allotment of Securities) Rule 2012:- For the formation of the Public Company, the prospectus must be signed and dated and contains the following information:

1. General Information:

  • Name and Addresses- It includes the name and registered office address of the Company. It must also include the name and address of the Company Secretary, Auditor, Chief Financial Officers, Legal Advisor, Banker, Trustee.
  • Issued Listed at (Name of Stock Exchange)
  • Opening and Closing Date of the issue- Details of opening and closing date of the Subscription list.
  • Rating of the shares and debentures
  • Details about underwriters
  • A statement by the Board of Directors- A statement was given by the Board of Directors about the separate bank account in which the money raised from the issue shall be deposited. Also, the Board of the Director discloses that how much amount they used or utilized.
  • Consent of the directors/ auditors/ bankers to the issue, experts opinion or another person as may be prescribed.

2. The capital structure of the Company:

  • Issued, subscribed, and paid-up capital
  • Size of the present issue

3. Terms of the Present Issue:

  • The Authority for the issue
  • Procedure and schedule for allotment and issue of securities
  • How to apply- Availability of Prospectus and Terms & Mode of Payment for the subscription
  • Special tax benefits to the shareholders and Company

4. Particulars of the Issue:

  • Objects of the Issue
  • Project Cost

5. The company, Management and Project:

  • History, main objects and present Business of the Company
  • Plant location, machinery, technology, etc.
  • Backgrounds of promoters, collaboration, etc.
  • Infrastructure and facility
  • The products and services
  • Information related to threat factors of certain specific projects or their imminent legal actions, the gestation period of the project, and all other information related to it.

6. Financial Performance of the Company:

  • Balance Sheet Data, Profit And Loss Account
  • Any change in accounting policy during the last three years
  • Stock market quotation of shares and debentures

7. Details of all payments refunds, interest, dividend, dues, etc.

8. detail of companies under same management- if there are numbers of companies under the same management, disclose all the details of these companies, issues of prospectus :.

Under Section 26 of the Companies Act, 2013, the issues of a prospectus are stated-

The prospectus shall be considered invalid if the company does not issue a prospectus before 90 days from the date from which the copy was delivered to the registrar.

The company can be punished if a prospectus was issued in contravention under Section 26 of the Act. The punishment for the contravention is a fine of ₹50000 and it may extend to ₹300000.

Misstatement of a Prospectus

The prospectus is a trusted legal document on which people can rely before subscribing or purchasing securities from the company. But any misstatement that occurs in the prospectus leads to punishment in the form of a fine or imprisonment. Misstatement includes an untrue or misleading statement, non-disclosing facts, which is issued in the prospectus.

Liability for misstatement in a Prospectus

The liabilities for Misstatement in a prospectus are Civil Liability (Section 35) and Criminal Liability (Section 34).

1. Civil Liability (S.35)

According to the provision of Section 35 under the Companies Act, 2013, civil liability arises when a person who has subscribed for securities on the faith of the misleading prospectus has remedies against the company and the directors, promoters, experts & every person who authorized the issue of prospectus.

(i) Remedies against Company :-

In against company, two remedies are available:

(a) Rescind the Contract – The person who purchases the shares can rescind the contract if he found any misstatement in the prospectus and the money will be refunded to him which he pays to the company while purchasing securities.

Right to rescind or terminate the contract is available if the person proves the following:

  • The prospectus was issued on the behalf of the company;
  • The statement must be untrue;
  • The statement must be a material misrepresentation;
  • The misrepresentation must have induced the shareholders to take the securities and he must have relied on the statement in applying for securities;
  • The misrepresentation of statement must be of fact and not of law
  • That he has taken action promptly to rescind the contract within a reasonable time and before the company goes into liquidation.

(a) Damages for Fraud – In this case, the person only claims damages against the company but he cannot rescind the contract because of unreasonable delay, affirmation (provide assurance), and commencement of winding- up. At these stages, the shareholder can file a suit against the company for the misstatement and claim damages for it.

(ii) Remedies against the directors, promoters, experts & every person who authorized the issue of prospectus –

In cases where it is proved that a prospectus has been issued with intent to defraud the applicants, then, every person referred to in subsection (1) of Section 35 [5] shall be personally accountable without any limitation of liability any of the losses or damages that may have been sustained by any person who subscribed to the securities based on such prospectus.

Defences available to avoid criminal liability:

Under Section 35 (2) of the Act, if the person proves that,

  • Having a director of the company given his consent for issuing prospectus but he withdrew his consent before the issue of the prospectus and that it was issued without his authority or consent;
  • That the prospectus was issued without his knowledge or consent and that on becoming aware he gave a reasonable public notice that it was issued without his knowledge or consent.

Criminal Liability (S.34)

According to the provision of Section 34 of the Companies Act, 2013, criminal liability arises where prospectus contains any untrue statement, then, every person who has authorized the issue of the prospectus shall be punishable under Section 447. The punishment involves imprisonment for a period of 6 months which can be extended to 10 years or a fine, maybe the amount involved in the fraud, or it can be extended 3 times the amount involved in the fraud or both.

Defences available under criminal liability:

The defenses are available under criminal law if a person proves that,

  • Such statement or omission was immaterial;
  • He has a judicious ground to consider that the inclusion or omission was necessary;
  • He has judicious ground to consider that the statement was true.

In APL Industries Ltd. v. Securities and Exchange Board of India , [6]

The SEBI (Securities and Exchange Board of India) ordered the company to refund the amount of subscription to the subscriber where the public issue of share was unsubscribed.

In Derry v. Peek , [7]

The prospectus of a company contained that the company has been authorized to use steam power in moving its trams. But, the authority that was authorized to approve the Board of Trade refuses its approval. The court held that there is no misstatement in the prospectus, the Board of Directors was not held guilty of fraud, because they were honest and they mentioned the statement in a good faith. They were not intended to deceive anyone.

In Henderson v. Lacon , [8]

In the prospectus, it is contended that the directors and their friends have subscribed a large portion of and they now offer to the public remaining shares. But in reality, the directors had subscribed only 10 shares each. The court held that the subscribers can rescind the contract.

In Arnison v. Smith , [9]

The court held that, in the prospectus, the non-disclosure of facts does not amount to misrepresentation unless the concealment has prevented an adequate appreciation of what was stated.

In Peek v. Gurney , [10]

The court held that-

  • Every man must be held responsible for the consequence of false representation made by him to another, upon which the other acts and is injured.
  • The aforesaid false representation was made with the intention that it should be acted upon by the third person in the manner resulting in injury.
  • Such injury must be an immediate consequence and not remote.

The prospectus is a legal document only issued by a public company on the verge of raising funds. The prospectus plays a major role in the decision-making of the subscribers for the subscription of securities (shares, debentures, and other related instruments). It is merely an invitation to offer for the subscription of shares. It includes detailed information of the company’s Board of Directors, Company Secretary, company’s management, capital structure, financial performance, recent projects of a company, and other related information.

For being a valid prospectus, it should contain all the essential requisites and it must be registered. If any prospectus is not registered then, it is considered invalid.  For any misstatement of a prospectus i.e. untrue statement or misleading statement to deceive anyone, then such person was held guilty and was liable for fine or imprisonment.

The public company must issue a prospectus for raising funds but, in case of private company converts into public then they should issue a prospectus or statement in lieu of prospectus with the memorandum of association (MOA) on its conversion into a public company.

  • https://vazagivire.weebly.com/uploads/1/3/4/8/134874695/mojopelufefadap.pdf
  • https://www.toppr.com/ask/question/according-to-the-companies-act-2013-a-company-proposing-to-issue-a-red-herring-prospectus/
  • https://www.citeman.com/12992-prospectus.html
  • https://link.springer.com/content/pdf/10.1007%2F978-3-030-14536-1.pdf
  • https://books.google.com/books?id=-LroDwAAQBAJ
  • http://mca.gov.in/SearchableActs/Section26.htm
  • http://www.sebi.gov.in/cms/sebi_data/attachdocs/1293422302215.pdf
  • https://icsi.edu/media/portals/70/290814.pdf
  • https://indiankanoon.org/doc/799181/
  • https://lawfinderlive.com/bts4/COMPANY.htm

Reference of Statutes and Books

  • The companies Act, 2013
  • Companies (Prospectus and Allotment of Securities) Rule 2012
  • Companies Rule 2014
  • Singh Avatar, Company Law, Seventeenth Edition, 2018

[1] Companies Act, 2013

[2] Section 2(70), Companies Act, 2013

[3] Section 32, Companies Act, 2013

[4] Section 31, Companies Act, 2013

[5] Under Section 35 (1) of the Companies Act, 2013, the term “person” includes directors, company secretary, auditor, chief financial officer, banker or other authorized officers.

[6] (2017) 200 Comp Cas 440 (Del)

[7] (1889) LR 14 AC (HL)

[8] (1867) LR e Eq 249

[9] (1889) LR 41 Ch D 348

[10] (1873) LR 6 (HL) 377

This article has been written by Aditi Sahu, 3rd Year (B.B.A. LL.B.) student at Banasthali Vidyapith.

Also Read – What Is The Procedure For Issuing Of Shares In India?

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Sponsorship Prospectus: Template, Example + How to Write

It is common for events to need sponsors, as events can be expensive to produce and require resources beyond a brand’s budget. In addition to the financial benefits, events with sponsors can leverage cross-marketing, showcase a specific partnership, and add meaning to a brand identity by publicizing the alliance. But how do brands secure sponsors for events? The key lies in a compelling sponsorship prospectus. In this guide, we define sponsorship prospectus, explain how to write a persuasive prospectus, provide a sponsorship prospectus template, and list sponsorship prospectus examples and success stories. 

What is a sponsorship prospectus?

A sponsorship prospectus is a structured, inspiring, and persuasive document that contains everything a potential sponsor would want to know about the event. The document includes audience demographics, testimonials from past sponsors, ROI information, ticket sales, and more. 

A sponsorship prospectus aims to communicate the details of an event, the sponsorship opportunities, 

and the sponsorship benefits in a way that inspires a company to sponsor an event. It is best practice to create a master sponsorship prospectus and customize each to target specific companies. 

How to Write a Sponsorship Prospectus

There are several key points to follow when writing a sponsorship prospectus: 

  • When a company reads the sponsorship prospectus, it must guide them through a genuine brand experience that tells your brand's story, communicates your brand identity, and helps them feel excited about being a sponsor. 
  • Leverage graphic design to communicate your message in color, style, and tone. 
  • Be concise and focus on the important details when seeking sponsorship. Avoid overwhelming the potential sponsor with too much information.
  • Share data points and statistics to persuade readers with facts. 
  • Personalize each prospectus to suit the interests and priorities of each prospective sponsor. This attention to detail and personalization will help companies feel understood and valued, increasing the likelihood of a productive partnership. 

Sponsor Prospectus Template

Here are the core components of a sponsorship prospectus: 

Opening Statement

On the first page, provide a brief overview and introduction to your brand and event. List contact information and social media handles. 

Table of Contents 

On the next page, list the table of contents to show the reader what to expect from the rest of the document. The table of contents also helps the reader quickly locate specific sections. 

Next, showcase the complex numbers, statistics, and data that proactively answer the question, "Why should a company care?" Use data on ROI, previous event attendance, existing registrants, and more to highlight your legitimacy and captivate the company's interest.    

Event Information 

This section provides a detailed event description with associated costs. It is imperative to think strategically about the information shared. Different sponsors prefer comprehensive breakdowns, while others prefer overviews or specific details.

Sponsor Benefits

It is time to showcase the benefits a sponsor can expect from the partnership. The benefits can include various marketing and promotional opportunities and information about anticipated audience scope and market reach. 

Request for Funding 

This section provides a detailed description of the vision or options for promotions. Some brands prefer to offer predetermined sponsorship tiers, and others prefer to pitch a more collaborative offer. 

Final Pitch and Call-to-Action 

In the final section, summarize your offering with a closing pitch and call to action. Provide relevant contact information and deadlines. 

Sponsorship Prospectus Example

Finding helpful examples of sponsorship prospectuses can be challenging since many brands consider them confidential. The competition for sponsors is intense, making it even more difficult to secure them. However, there is an available open-source document that can be used as a practical reference. 

The Organisation for Economic Co-operation and Development published a sponsorship prospectus for Karratha, Australia. The front page showcases a photograph depicting an area relevant to the event. The colors, fonts, and layout communicate the tone and style of the event. The introduction page contains key information, and the following pages outline relevant details. The document concludes with a booking form so interested parties can immediately apply to sponsor the event. 

There are many elements to consider and skillfully execute in a sponsorship prospectus. Many brands benefit from partnering with an expert; we are here to help. 

Hamilton is a full-service event marketing agency with a 75-year legacy creating immersive brand experiences for companies throughout North America and worldwide. We design, produce, and execute integrated experiences that drive meaningful connections between your brand and audience. Our full range of solutions includes exhibits, proprietary events and conferences, mobile tours, corporate environments, outdoor events, and digital experiences. 

For expert assistance with your event and sponsorship prospectus, contact Hamilton today! 

Prospectus of a Company Definition, Types, Examples

What is ESOP, Full Form, Importance, and Benefits

What is meant by a prospectus and how is it useful for the investors? It is an important document that consists of a lot of details that will help the investors. We attempt to provide insights into the purpose, contents, and significance of prospectuses. It helps you to understand the complexities of company offerings, understand financial statements, assess risks, and make informed investment decisions.

Table of Contents

Prospectus Definition:

A prospectus is a legal document that companies use to provide information to potential investors about the securities they are offering for sale. It is a formal document that contains all the relevant information about the company, its business, financials, and the securities being offered. 

Prospectus Example:

An example of a prospectus is the one issued by a company that is going public through an initial public offering (IPO). The prospectus will contain information about the company’s business, financials, management, and the securities being offered. It will also include the risks associated with investing in the company’s securities.

What is a Prospectus and its Importance?

A prospectus is an important document for investors as it provides them with all the relevant information they need to make informed investment decisions. It is a legal document that companies are required to file with the SEBI  before offering securities for sale to the public. 

A prospectus contains information about the company’s business, financials, management, and the securities being offered. It also includes the risks associated with investing in the company’s securities.

Types of Prospectus:

There are four types of prospectus:

Preliminary Prospectus (Red Herring Prospectus): 

This is the first version of the prospectus that is filed with the SEBI. It contains all the relevant information about the company and the securities being offered, but it is subject to change.

It is an initial version issued during the early stages of an offering. It contains essential information but is subject to change.

Definition of Red Herring Prospectus

The document – Red Herring Prospectus, is devoid of a detailed statement describing the tariff of the company’s securities. It contains insights on the total funds raised, the offer’s closing price and related information that has to be addressed to the Securities and Exchange Council. 

Enterprises which have already made up their minds about distributing securities publicly, brings out the red herring prospectus well before publishing the company prospectus. 

Offer cannot be placed in the market at least within three days of filing a red herring prospectus in association with the ROC. 

Final Prospectus: 

This is the final version of the prospectus that is filed with the SEBI. It contains all the relevant information about the company and the securities being offered, and it is not subject to change.

Abridged Prospectus:

 It is a concise version of the prospectus that highlights key information, making it easier for investors to understand.

Characteristics of the Abridged Prospectus in India

Many key components of the company prospectus are addressed in the abridged memorandum. Application or invitation acceptance is not possible if no abridged prospectus remains in the first place.

However, three exceptional cases exist:

  • The abridged prospectus is not required for private offerings.
  • Also, it is not needed when an offer is limited to debenture occupants or company members who may or may not have the right to renounce.
  • Debentures or shares announced must be complementing and equivalent to the already existing assets.

Anyone who desires to retain a specimen of the prospectus will be provided with a copy listing all the subscribers. This copy gets distributed before the offer is pulled off. As an enterprise fails to maintain this legal compliance, it has to pay ₹50,000 for every single default.

Shelf Prospectus: 

This is a prospectus that allows a company to offer securities periodically over a period of time, without having to file a new prospectus each time.

What is Shelf Prospectus?

The companies which fulfil the criteria presented by the National Securities and Exchange Council are eligible for filing the Shelf Prospectus. This decision is taken by the proprietors in the preliminary offer stage as allotment will not be possible without the approval of the ROC or Registrar of Companies.

The initial invitation states a validity duration of a minimum of 1 year counting from the allocation date of the foremost request. During the active window, you do not need to worry about additional prospectus requirements to place successive bids. The representative must file an information notation along with the shelf prospectus before submitting the application.

The highlighted notation must state every material evidence of the related charges that affect the organisation’s financial standpoint. Companies need to complete the formalities within a deadline otherwise the promoters are not allowed to place legal offers.

The documented memorandum data is recorded as a prospectus that goes alongside the shelf prospectus each time the corporate body presents an appeal.

A shelf prospectus is efficient in conserving time and expenses as changes are not required to be mentioned each time while filing the prospectus. Whenever an applicant decides to discontinue, the company must refund the amount within fifteen days.

What is Prospectus and its Contents? 

  • Risk Factors: This section outlines the risks associated with investing in the company’s securities.
  • Business Overview: This section provides an overview of the company’s business, including its history, products, and services.
  • Management: This section provides information about the company’s management team.
  • Financials: This section provides information about the company’s financials, including its income statement, balance sheet, and cash flow statement.
  • Use of Proceeds: This section outlines how the company plans to use the proceeds from the sale of securities.

What’s the Difference Between a Preliminary and a Final Prospectus?

The main difference between a preliminary and a final prospectus is that the preliminary prospectus is subject to change, while the final prospectus is not. 

The preliminary prospectus is the first version of the prospectus that is filed with the SEBI, and it contains all the relevant information about the company and the securities being offered. However, it is subject to change based on feedback from the SEBI or investors. 

The final prospectus is the final version of the prospectus that is filed with the SEBI, and it contains all the relevant information about the company and the securities being offered. It is not subject to change.

How a Prospectus is Useful for Investors 

 A prospectus is a document that has important information about a company. It tells you how the company works, how much money it makes, and the risks involved. It also introduces you to the people who run the company and explains what they plan to do with the money they raise. The prospectus follows the rules and includes other important legal information. 

Understanding Prospectus 

 To make smart investment decisions, it’s important for investors to understand the prospectus. 

  • This document provides valuable information about how the company works.
  • It also reveals the company’s money situation.
  • Additionally, it outlines the risks involved in the investment.
  • By reading and analysing the prospectus carefully, investors can gain clarity.
  • This clarity helps them make informed choices about their investments.

Why Is a Prospectus Useful for Investors? 

Prospectuses are important for investors. They help investors understand the investment opportunity better. They show how the company is doing financially and what risks are involved. Investors can compare different options and make smart choices that match their goals. 

Nature of Invitation

The prospectus can only be published by the company to put forward the business’ securities for attracting investment. Given that the invitation is intended to bring in new purchasers of the share capital, anyone can request participation. The only condition is that invitation has to be from the company’s end or any agency representing the firm.

Below mentioned clauses act as distinctive measures that affect the provisions of a prospectus: 

  • When company shares or debentures are offered to the general mass by issuing a prospectus then we call it a public issue.
  • Some events witness the customers receiving official paperwork that is marked highly secretive. This document includes the projected shares in addition to the application format presented by the MD. This category of papers have limited access to ensure safety the of commercial planning.
  • On some occasions, the company decides not to publish the prospectus. Instead, they send an open offer to all. Notices are issued with the due assistance of lawyers to declare such announcements. The company can also advertise such decisions and spread the news even more rapidly through brochures.
  • Private corporations may extend limited offers to a selected pool of customers. We consider this behaviour under a private offer.
  • Individual offers are disregarded as public offerings.
  • Offers made by promoters to his closed circle of friends and family members are considered to be private in nature. 

Prospectus Report in Auditing

As we discussed earlier that the prospectus can only be published by company, now it is essential to learn what reports are exactly included in the company prospectus:

  • Quarterly business reports showcasing each transaction
  • Profit and loss reports indicating the business’ performance for the previous five fiscal years
  • Auditor’s reports against the profit and loss reports of the last five years presented by the organizational accountants
  • Auditor’s approval stating the net assets, liabilities, profits and losses of the concerned corporate entity.

Data Published in Company Prospectus 2022

Each of the following data forms an integral part of a company prospectus:

  • The legal name and full address line of the organisation’s registered office, secretary, chief financial executive, bankers, auditors, trustees and underwriters as well
  • Declaration disclosing the allotment dates, closing dates of an issue and the refund structure
  • Statement undersigned by the Directors who have gone through and verified the particulars of the concerned business account
  • Particulars of the resolution
  • Minutes of the underwriting matter
  • Consent letter from each auditor and banker
  • Allocation planning along with proper planning on how to distribute securities on time
  • Present operational location
  • The share capital structure of the business
  • Details about risk management factors, progress tracking system, deadline evaluation method, gestation period and so on.

All these matters are revealed in a way instructed by the promoters. Exclusive details pertaining to the Directors that may prove sensitive to the business commencement are generally avoided.

If any infringement is detected while designing the provisions of a prospectus then the company may face a sanction of at least ₹50,000. For serious instances, this punishment can range up to an amount of ₹3,00,000. 

The people who are involved in fraudulent acts within the company may be sent behind the bars for a minimum of 3 years along with a penalty of ₹3 lakhs.

How a Prospectus is Useful for Investors

A prospectus is a legally mandated document, and is required to be filed with the relevant regulatory body. It provides the public with critical details about an investment opportunity. Investors benefit from it as it outlines the risks tied to purchasing securities or funds. Typically, an initial overview of risks is presented, followed by in-depth explanations. When a company seeks funding through stock or bond offerings, investors must scrutinise the company’s financial health to ensure its ability to meet financial obligations.

Misstatement In Prospectus

A misstatement in the document occurs when a company includes false information, leading to investor deception. Misstatements can involve incorrect details like location, address, contact information, financial data, and the roles of management within the business. Responsibility for misstatements falls on several parties, with potential civil or criminal liability:

  • Directors at the time of issuance
  • Individuals named as directors or those who agreed to serve as directors and are mentioned in the document
  • Company promoters
  • Any person authorised to issue the document.

In cases of misinformation, investors who subscribed to shares, bonds, or securities based on false information may receive compensation for damages. They can also cancel the contract. However, if investors engage in actions like selling stocks, transferring shares, receiving dividends, or participating in voting, they may forfeit the right to cancel the contract or seek damages.

Conclusion 

A prospectus plays a crucial role in helping investors understand company offerings and make informed investment decisions. By examining the prospectus, investors can assess the company’s financials, risks, and growth prospects, enabling them to align their investments with their goals and risk appetite. Always remember to read the prospectus thoroughly before making any investment decisions. For any clarifications, feel free to contact the experts at Vakilsearch.

What are the main contents of a prospectus?

The main contents of a prospectus typically include: Details about the company's business model Financial statements Risk factors Management team Industry analysis Use of proceeds Subscription details Legal and regulatory disclosures.

What are the 4 types of Prospectus?

The four types of prospectus are preliminary prospectus, red herring prospectus, final prospectus, and shelf prospectus.

What is the purpose of a Prospectus?

The purpose of a prospectus is to provide potential investors with comprehensive information about an investment offering. It allows investors to evaluate the opportunity, assess risks, and make informed investment decisions.

What are the types of prospectus of a company?

The types of prospectus that a company may issue include an initial public offering (IPO) prospectus, follow-on offering prospectus, debt offering prospectus, and rights issue prospectus.

What are the three parts of a prospectus?

The three parts of a prospectus typically include the front section (containing the summary and key details), the main section (comprising detailed information about the company and the offering), and the back section (consisting of financial statements and legal disclosures).

Who issues the prospectus?

A prospectus is issued by the company seeking to raise funds through an offering. The company, along with its underwriters, prepares and releases the prospectus to potential investors.

What is a prospectus called?

A prospectus is also commonly known as an offering document or an investment prospectus.

What is a prospectus also known as?

A prospectus is also known as an offering memorandum or a disclosure document.

Who receives the final Prospectus?

The final prospectus is typically received by potential investors who have shown interest in the offering. It is distributed to individuals or entities considering an investment in the company's securities.

What are the contents of a prospectus?

The contents of a prospectus include the cover page, table of contents, risk factors, business overview, management, financials, and use of proceeds.

What is prospectus in company Act 2013?

The Companies Act 2013 requires companies to file a prospectus with the Registrar of Companies before offering securities for sale to the public.

What are the 3 types of prospectus?

The three types of prospectus are preliminary prospectus, red herring prospectus, and final prospectus.

What are the five content of prospectus?

The five contents of a prospectus are risk factors, business overview, management, financials, and use of proceeds.

What is called prospectus?

A prospectus is a legal document that companies use to provide information to potential investors about the securities they are offering for sale.

What is the rule of prospectus?

The rule of prospectus is that companies must provide all the relevant information about the securities being offered in the prospectus, and the information must be accurate and not misleading.

What are the objectives of prospectus?

The objectives of a prospectus are to provide investors with all the relevant information they need to make informed investment decisions.

What are the four main types of prospectuses used by companies, and how do they differ?

Companies use four main types of prospectuses: ● Deemed prospectus ● Red herring prospectus ● Abridged prospectus ● Shelf prospectusThey differ in their level of detail and timing in the offering process.

Could you share an example of a prospectus to help illustrate its content and purpose?

An example of a prospectus can be found in a company's Initial Public Offering (IPO) documents. It provides detailed information about the company, its financials, and the risks associated with investing.

Can you provide a detailed overview of what a prospectus entails, and sections it typically contains?

A prospectus typically includes an executive summary, company overview, risk factors, financial information, and management discussion and analysis

Are there only two primary types of prospectuses, or are there more variations in practice?

Beyond the primary types, variations in prospectuses can exist based on regulatory requirements and the specific offering type

What are the three key parts or sections that make up a comprehensive prospectus?

A comprehensive prospectus comprises three key sections: the cover, the body containing detailed information, and any appendices with additional data.

Why is a company's prospectus considered an essential document, and what role does it play in investor relations?

A company's prospectus is essential as it informs potential investors about the company's operations, financials, and risks, fostering transparency and trust in investor relations.

What are some notable features of a well-prepared prospectus that can attract potential investors?

Well-prepared prospectuses feature clear language, thorough financial data, and risk assessment, making them attractive to potential investors.

What are the primary objectives of a company when creating and distributing a prospectus?

Primary objectives of a company in creating a prospectus include raising capital, complying with legal requirements, and attracting suitable investors.

Who is responsible for the preparation and issuance of a company's prospectus, and what expertise is required for this task?

Preparing a prospectus involves various experts, including legal counsel, accountants, and financial analysts, to ensure compliance and accuracy

What are some real-world examples of cases or legal situations involving prospectuses that have had significant impacts?

Notable cases like Enron and WorldCom have seen significant legal consequences related to prospectus inaccuracies, emphasising the importance of accurate disclosure in these documents.

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Issue Price Statement

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Report of Organizational Actions Affecting Basis of Securities: The Walt Disney Company

Report of Organizational Actions Affecting Basis of Securities: Twenty-First Century Fox, Inc.

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We are committed to operating our businesses with the utmost integrity, adopting governance policies that promote the thoughtful and independent representation of our shareholder interests.

Board of Directors

The Walt Disney Company board of directors is a strong, balanced blend of global industry leaders whose exceptional knowledge and considerable experience strategically guide and support the delivery of long-term value to the Company.

Mark G. Parker

Chairman of the Board

Corporate Governance

Mark G. Parker is the Executive Chairman of NIKE, Inc. Mr. Parker previously served as President and Chief Executive Officer of NIKE, Inc. since 2006 and Chairman of NIKE since 2016. He has been employed by NIKE since 1979 in a variety of positions with primary responsibilities in product research, design and development, marketing and brand management. Mr. Parker has been a member of the Board of Directors of NIKE since 2006, and has been a Director of the Company since January 2016 and was elected as Chairman of the Board as of April 3, 2023.

Mary T. Barra

Director since 2017

Corporate Governance

Mary T. Barra has been Chair of General Motors Company since 2016 and Chief Executive Officer of General Motors since 2014.  Prior to that time, she served at General Motors as Executive Vice President, Global Product Development, Purchasing and Supply Chain from 2013 to 2014, Senior Vice President, Global Product Development from 2011 to 2013, Vice President, Global Human Resources from 2009 to 2011 and Vice President, Global Manufacturing Engineering from 2008 to 2009.  In addition to serving on the Board of General Motors from 2014, she served on the Board of General Dynamics Corporation from 2011 to 2017.  Ms. Barra has been a Director of the Company since August 2017.

Safra A. Catz

Director since 2018

Corporate Governance

Safra A. Catz has been a Chief Executive Officer of Oracle Corporation since 2014. She served as President of Oracle from 2004 to 2014 and as the company's Chief Financial Officer from 2011 to 2014 and from 2005 to 2008. Prior to being named President of Oracle, she held various other positions with Oracle from 1999. She has been a member of the Board of Directors of Oracle since 2001, and was a director of HSBC Holdings from 2008 through 2015. She was elected a Director of the Company in December 2017, effective February 1, 2018.

Amy L. Chang

Director since 2021

Corporate Governance

Amy Chang serves on the Board of Directors of Procter & Gamble and as an advisor to more than a dozen companies. From 2018 to 2020, Ms. Chang served as Executive Vice President and General Manager of Cisco’s Collaboration business. She joined Cisco through the acquisition of the company she founded, Accompany, an artificial intelligence/machine learning-based relationship intelligence platform serving Fortune 500 companies. Prior to Accompany, where she served as Chief Executive Officer, Ms. Chang was Global Head of Product, Google Ads Measurement. She has held additional positions with eBay, McKinsey, Intel, AMD and Motorola, and previously served on the boards of Cisco, Splunk, Informatica and Marqeta. Ms. Chang has been a Director of the Company since 2021.

Jeremy Darroch

DIRECTOR SINCE 2024

Corporate Governance

Sir Jeremy Darroch serves as a Director of Reckitt Benckiser Group plc and is their incoming Chairman. Previously, Darroch served as Executive Chairman and Group Chief Executive Officer of Sky. He joined Sky as Chief Financial Officer in 2004 and was promoted to Group Chief Executive Officer in 2007 and served as Executive Chairman in 2021. Darroch has been a Director of the Company since 2024.

Francis A. deSouza

Corporate Governance

Francis A. deSouza was formerly the President and Chief Executive Officer of Illumina, Inc., a biotechnology company and served as President of Illumina from 2013 to 2016. Prior to joining Illumina, Mr. deSouza was President, Products and Services, of Symantec Corporation from 2011 to 2013, and Mr. deSouza served as Symantec's Senior Vice President, Enterprise Security Group, from 2009 to 2011. Prior to that time he founded or worked in a variety of other technology businesses. He has served as a Director of Illumina since 2014 and was a director of Citrix Systems, Inc. from 2014 to 2016. He was elected a Director of the Company in December 2017, effective February 1, 2018.

Carolyn N. Everson

DIRECTOR SINCE 2022

Corporate Governance

Carolyn Everson most recently served as President of Instacart. Prior to that role, Ms. Everson was Vice President, Global Marketing Solutions at Meta from 2011-2021. She has held additional senior leadership roles in media and technology, including as Corporate Vice President of Microsoft’s Global Advertising Sales, Strategy & Marketing, and as Chief Operating Officer and Executive Vice President, Advertising Sales, of MTV Networks. Prior to MTV Networks, Ms. Everson worked at PriMedia and Walt Disney Imagineering. She serves on the boards of The Coca Cola Company, Villanova University and the Humane Society of the United States. Ms. Everson has been a Director of the Company since 2022.

Michael B.G. Froman

DIRECTOR SINCE 2018

Corporate Governance

Michael B.G. Froman is president of the Council on Foreign Relations (CFR). He previously served as vice chairman and president, strategic growth, at Mastercard, chairman of the Mastercard Center for Inclusive Growth, and a distinguished fellow at CFR. He served as United States Trade Representative in the Executive Office of the President from 2013 to 2017, and as Assistant to the President and Deputy National Security Advisor for International Economic Policy from 2009 to 2013. Prior to that time he held various positions at Citigroup from 1999 through 2009, including Chief Executive Officer of CitiInsurance and Chief Operating Officer of Citigroup’s alternative investments business. Earlier in his career, Mr. Froman served in the Clinton administration, holding positions both at the US Department of Treasury and the White House. He has been a Director of the Company since September 2018.

James P. Gorman

Director since 2024

Corporate Governance

James P. Gorman is Executive Chairman of Morgan Stanley. Previously, Mr. Gorman served as Morgan Stanley’s Chief Executive Officer from 2010 to 2023 and Chairman from 2012 to 2023. He joined the Firm in February 2006 and was named Co-President in December 2007. Before joining Morgan Stanley, Mr. Gorman held executive positions at Merrill Lynch and was a senior partner at McKinsey & Co. He serves as a Director of the Council on Foreign Relations, Chair of the Board of Overseers of the Columbia Business School, and is a member of the Business Council. He formerly served as a Director of the Federal Reserve Bank of New York, President of the Federal Advisory Council to the U.S. Federal Reserve Board, and Co-Chairman of the Business Committee of the Metropolitan Museum of Art. Mr. Gorman has been a Director of the Company since 2024.

Robert A. Iger

Director since 2022

Corporate Governance

Robert A. Iger is Chief Executive Officer of The Walt Disney Company, having returned to the company in November of 2022 after serving as CEO and Chairman from 2005 to 2020, and then as Executive Chairman and Chairman of the Board through 2021.

Since returning as CEO, Mr. Iger has led a significant, enterprise-wide transformation to restore creativity to the center of the company and position Disney’s streaming business for sustained growth and profitability. During his more than 15 years at the helm of Disney, Mr. Iger has served as steward of the world’s most respected and beloved brands. His strategic vision focuses on three fundamental pillars: generating the best creative content possible; fostering innovation and utilizing the latest technology; and expanding into new markets across the globe.

Widely recognized as one of the world’s most consequential business leaders, Mr. Iger has built on Disney’s rich history of unforgettable storytelling with the acquisitions of Pixar (2006), Marvel (2009), Lucasfilm (2012), and 21st Century Fox (2019); the landmark opening of Disney’s first theme park and resort in mainland China, Shanghai Disney Resort; and the release of a number of record-setting films, including Marvel’s Avengers: Endgame , Disney’s Frozen and Frozen 2 , and Marvel’s groundbreaking Black Panther . Always one to embrace new technology, Mr. Iger made Disney an industry leader through its creative content offerings across multiple new platforms, including the highly successful launch of the Disney+ streaming service in November 2019.

Disney’s exceptional entertainment experiences, widely diverse content, and Iger’s unique skill in managing businesses in an integrated manner led to strong results. During Mr. Iger’s tenure, The Walt Disney Company has been recognized as one of the “Most Reputable Companies” in both America and the world by  Forbes  magazine (2006–2019); one of the “Best Employers” in both America and the world by Forbes magazine (2019 and 2018, respectively); one of the “World's Most Admired Companies” by  Fortune  magazine (2009–2021); and one of the “World's Most Respected Companies” by  Barron’s  (2009–2017).

Mr. Iger was first appointed Chief Executive Officer of Disney in October 2005 and was elected Chairman in 2012. In February 2020, he assumed the role of Executive Chairman and directed the company’s creative endeavors until retiring in December 2021. From 2000-2005, Mr. Iger served as Disney’s President and Chief Operating Officer. He officially joined the Disney senior management team in 1996 as Chairman of the Disney-owned ABC Group, and in 1999, was given the additional responsibility of President, Walt Disney International. In that role, Mr. Iger expanded and coordinated Disney’s presence outside of the United States, establishing the blueprint for the company’s international growth today. As Chairman of the ABC Group, Mr. Iger oversaw the broadcast television network and station group, cable television properties, and radio and publishing businesses, and also guided the complex merger between Capital Cities/ABC, Inc. and the Walt Disney Company. During Mr. Iger’s years with ABC, he obtained hands-on experience in every aspect of the television business—including news, sports, and entertainment—as well as in program acquisition, rights negotiations, and business affairs. He began his career at ABC in 1974.

In 2023, Mr. Iger was featured on the cover of TIME as part of its annual 100 Most Influential People issue. Additionally, he was TIME ’s Businessperson of the Year (2019); one of  Forbes magazine's “World’s Most Powerful People” (2018); one of the “Top Gun CEOs” by  Forbes magazine (2009); one of  Fortune  magazine’s “25 Most Powerful People in Business” (2006, 2007); one of the “Best CEOs” by  Institutional Investor  magazine (2008, 2009, 2010, 2011); MarketWatch's “CEO of the Year” (2006); and “CEO of the Year” by  Chief Executive  magazine (2014).

Mr. Iger was inducted into the Television Academy Hall of Fame in January 2020, and the Broadcasting and Cable Hall of Fame in 2015. He currently serves on the boards of the 9/11 Memorial & Museum and Bloomberg Philanthropies. In 2012, Mr. Iger became a member of the Academy of Motion Picture Arts and Sciences, one of the nation’s most prestigious honorary societies, which recognizes some of the world’s most accomplished scholars, scientists, writers, artists and civic, corporate, and philanthropic leaders. He served as chairman of the capital campaign for the new Academy Museum of Motion Pictures in Los Angeles. From 2011-2019 he was a member of the Apple board of directors.

In September 2022, Mr. Iger was recognized as an Honorary Knight Commander of the Most Excellent Order of the British Empire by Her Late Majesty Queen Elizabeth II for his services to the UK / US relations.

Mr. Iger is the author of the  New York Times  best-selling book The Ride of a Lifetime: Lessons Learned from 15 Years as CEO of The Walt Disney Company , published in 2019. He is a graduate of Ithaca College.

Maria Elena Lagomasino

DIRECTOR SINCE 2015

Corporate Governance

Maria Elena Lagomasino is the Chief Executive Officer and Managing Partner of WE Family Offices, an office serving high net worth families, and has held these positions since March 2013. Ms. Lagomasino served as Chief Executive Officer of GenSpring Family Offices, LLC, an affiliate of SunTrust Banks, Inc., from November 2005 through October 2012. From 2001 to 2005, Ms. Lagomasino was Chairman and Chief Executive Officer of JPMorgan Private Bank, a division of JPMorgan Chase & Co., a global financial services firm. Prior to assuming this position, she was Managing Director of The Chase Manhattan Bank in charge of its Global Private Banking Group. Ms. Lagomasino had been with Chase Manhattan since 1983 in various positions in private banking. Ms. Lagomasino is a member of the Council on Foreign Relations, and is a founder of the Institute for the Fiduciary Standard. She is a director of the Americas Society and served as a Trustee of the National Geographic Society from 2007 to 2015. She served as a director of the Coca-Cola Company from 2003 to 2006 and from 2008 to the present, and she served as a director of Avon Products, Inc. from 2001 to March 2016. Ms. Lagomasino has been a Director of the Company since 2015.

Calvin R. McDonald

Corporate Governance

Calvin McDonald is Chief Executive Officer of lululemon athletica inc., an athletic apparel company with more than 500 company-operated stores in 17 countries. Mr. McDonald joined lululemon in 2018 and is a member of its Board of Directors. Previously, he served as president and CEO of Sephora Americas, a division of the LVMH group of luxury brands, from 2013 to 2018. Mr. McDonald was President and CEO of Sears Canada from 2011-2013, and spent 17 years at Loblaw Companies Limited, the largest retailer in Canada, where he was born and raised. From 2016-2020, he served on the Board of Directors of Cole Haan. Mr. McDonald is a growth-oriented leader with a proven track record helping large organizations scale and innovate how brands engage with customers – in stores, across digital channels, and from their home. Mr. McDonald has been a Director of the Company since 2021.

Derica W. Rice

DIRECTOR SINCE 2019

Corporate Governance

Derica W. Rice was formerly the President of CVS Caremark, the pharmacy benefits management business of CVS Health, and Executive Vice President of CVS Health. Prior to that time, he was employed in various executive positions at Eli Lilly and Company since 1990, most recently serving as Executive Vice President of Global Services and Chief Financial Officer from 2006 to 2017. Mr. Rice was a member of the Board of Directors of Target Corporation from 2007 to January 2018. Mr. Rice will contribute to the mix of experience and qualifications the Board seeks to maintain through his experience in various positions at CVS Health and Eli Lilly and his other public company board experience. Mr. Rice leads the pharmacy benefits management business of CVS Health and had extensive experience in the financial function at Eli Lilly, including serving as Eli Lilly’s chief financial officer. As such, he brings practical knowledge of executive management of complex, worldwide businesses, and extensive experience in a wide range of financial and accounting matters including management of worldwide financial operations, financial oversight, risk management and the alignment of financial and strategic initiatives.

Audit Committee

The Audit Committee assists the Board of Directors in its oversight of the integrity of the Company’s financial statements, compliance with legal and regulatory requirements, the qualifications and independence of independent auditors, and the performance of independent auditors and the internal audit function.

Audit Committee Member

AUDIT COMMITTEE CHAIR

View Audit Committee Charter

Compensation Committee

The Compensation Committee reviews and approves corporate goals and objectives relevant to the compensation of the Company’s Chief Executive Officer, evaluates the performance of the Chief Executive Officer in light of those goals and objectives, and determines and approves the compensation level for the Chief Executive Officer based upon this evaluation.

COMPENSATION COMMITTEE MEMBER

Compensation Committee Chair

View Compensation Committee Charter

Governance and Nominating Committee

The Governance and Nominating Committee monitors the implementation and operation of the Company’s Corporate Governance Guidelines, reviews from time to time the adequacy of the Corporate Governance Guidelines in light of broadly accepted practices of corporate governance, emerging governance issues and market and regulatory expectations, and advises and make recommendations to the Board with respect to appropriate modifications. They also identify, review and evaluate candidates for election as Director who meet the standards set forth in the Corporate Governance Guidelines.

Governance and Nominating Committee Member

GOVERNANCE AND NOMINATING COMMITTEE MEMBER

Governance and Nominating Committee Chair

View Governance and Nominating Committee Charter

Executive Committee

Executive Committee Chair

Corporate Governance

Chief Executive Officer

Governing Documents

Twdc standards of business conduct, certificate of incorporation, code of business conduct and ethics for directors, corporate governance guidelines, whistleblower policy/worldwide phone numbers, contacting the board.

Shareholders and other parties interested in communicating directly with the Chairman of the Board or with the non-management directors as a group may do so by writing to:

Chairman of the Board The Walt Disney Company 500 South Buena Vista Street Burbank, California 91521-0931

The Governance and Nominating Committee of the Board has approved a process for handling letters received by the Company and addressed to non-management members of the Board.

Under that process, the Corporate Secretary of the Company reviews all such correspondence and regularly forwards to the Board a summary of all such correspondence and copies of all correspondence that, in the opinion of the Corporate Secretary, deals with the functions of the Board or committees thereof or that he otherwise determines requires their attention. Directors may at any time review a log of all correspondence received by the Company that is addressed to members of the Board and request copies of any such correspondence.

Concerns relating to accounting, internal controls or auditing matters are immediately brought to the attention of the Company’s internal audit department and handled in accordance with procedures established by the Audit Committee with respect to such matters.

Disney Shareholder Accounts

Q: How do I transfer shares from my account to a new and/or existing Disney Shareholder account? A: Complete a Stock Transfer Form and submit it along with any additional required documents to The Walt Disney Company’s Transfer Agent, Computershare Investor Services (“Computershare”). The Stock Transfer Form is available at .

Q: How do I access my Disney Shareholder Account? A: To access your Disney Shareholder Account, click here . Please note that you will be leaving Disney.com to access your account information. You will be required to register as a user on the system to access your shareholder information.

Disney Annual Meeting of Shareholders

Q: When and where will the 2024 Annual Meeting of Shareholders be held? A: The annual meeting of shareholders will be held on Wednesday, April 3, 2024 at 10:00 a.m. Pacific Time by virtual meeting at virtualshareholdermeeting.com/DIS2024 and will be made available via webcast at disney.com/investors .

Q: What time will the meeting begin? A: Electronic entry to the meeting will begin at 9:00 a.m. PT and the meeting will begin promptly at 10:00 a.m. PT.

Q: What will I need to join the virtual meeting? A: To attend the virtual annual meeting, you must be a shareholder on the record date and have previously registered to attend the meeting. You may register to attend the virtual meeting on or before 10:00 a.m. PT on April 2, 2024 by visiting ProxyVote.com/Disney and selecting “Attend a Meeting.” You will need the 16-digit control number found on your notice, WHITE voting instruction form or WHITE proxy card. After you have registered, you will receive a confirmation e-mail with information on how to attend the meeting. Q: Where can I find the Rules of the Meeting? A: The rules of the meeting can be found here . -->

Q: If I hold my shares through a broker, how do I obtain a control number to attend the meeting? A: Beneficial shareholders who do not have a control number should follow the instructions provided on the WHITE voting instruction form provided by their broker, bank, or other nominee.

Q: When should I expect to receive my proxy materials? A: Proxy materials are being mailed to holders as of the record date and are expected to arrive in mid- to late-February. Shareholders who had earlier consented to receiving proxy materials by email will likely receive them in mid-February.

Q: Where can I find more information about this year’s meeting? A: More information can be found at www.votedisney.com .

Q. If I plan to attend the virtual meeting, should I still vote in advance? A. Yes, please vote by proxy promptly upon receiving your materials. If you pre-register for the meeting, you may vote again at the virtual annual meeting should you wish to change your vote.

Q: Can I make advance reservations? A: No, but as described above, you must pre-register. Please note that participation in the meeting is limited due to the capacity of the host platform, and access to the meeting will be accepted on a first-come, first-served basis once electronic entry begins on the day of the meeting.

Q: What will happen if the venue fills to capacity? A: You can listen to the meeting which will be available on our Investor Relations website.

Q: Is it possible to attend the meeting as a guest? A: Only shareholders with a valid control number will be allowed to attend. If you cannot attend the meeting or are not a shareholder of record, the meeting will be available on our Investor Relations website.

Q: Can I vote in the virtual meeting? A: Yes, but we strongly encourage you to vote your proxy by Internet, telephone, or mail prior to the meeting. Please review the sections “Attendance at the Meeting” and “Voting” beginning on page 111 of the Proxy Statement .

Q: Can I ask a question in the virtual meeting? A: Shareholders of record who have pre-registered and wish to ask a question may submit a question in advance of or during the Annual Meeting. To submit a question in advance of the Annual Meeting, visit ProxyVote.com/Disney and enter your 16-digit control number included in your notice, WHITE voting instruction form or WHITE proxy card.

Q: Who should I contact if I have questions about voting my shares? A: If you have any questions or require and assistance with voting your shares, please contact Disney’s proxy solicitor:

INNISFREE M&A INCORPORATED Shareholders may call 1 (877) 456-3463 (toll-free from the U.S. and Canada) or +1 (412) 232-3651 (from other countries) Banks and Brokers may call collect 1 (212) 750-5833

Q: What if I have technical difficulties trying to access the virtual meeting? A: Please call the support team at the numbers listed on the log-in screen. If there are any technical issues in convening or hosting the meeting, we will promptly post information to our Investor Relations website, www.disney.com/investors , including information on when the meeting will be reconvened. Q: What types of technology will I need to participate in the meeting? A: A modern web browser is recommended to access the presentation. For optimal viewing and usage, the site is best viewed with a screen resolution of 1024x768 and above. To test your browser's compatibility, click here . -->

All information is subject to change.

Disney Stock

Q: Where are your shares traded? A: Disney common stock is traded on the New York Stock Exchange.

Q: What is the ticker symbol? A: DIS

Q: What is the CUSIP number? A: 254687106

Q: Can I buy or sell stock directly through Disney? A: Yes, you can buy and sell shares directly through The Walt Disney Company Investment Plan. The Walt Disney Company Investment Plan Prospectus and Enrollment Form are available in the Forms section of this website. Additional information regarding The Walt Disney Company Investment Plan is available at www.disneyshareholder.com .

Q: When did Disney declare the most recent dividend payment? A: On November 30, 2023 The Walt Disney Company Board of Directors declared a cash dividend of $0.30 per share, payable January 10, 2024 to shareholders of record at the close of business on December 11, 2023.

Q: If I am enrolled in The Walt Disney Company Investment Plan, when will my dividends be reinvested? A: The reinvestment of your dividends will be completed within five business days of the dividend payment date.

Q: If I am enrolled in The Walt Disney Company Investment Plan, when will I receive my dividend statement? A: Account statements reflecting the payment and reinvestment of dividends for The Walt Disney Company Investment Plan will be mailed only on an annual basis if dividends were declared in the prior calendar year. You may also review account transactions, including dividend reinvestment transactions, by accessing your shareholder account online at www.disneyshareholder.com .

Q: If I am not enrolled in The Walt Disney Company Investment Plan, how will my dividend be paid? A: The dividend is paid by check or may be directly deposited into a bank account. Most domestic banks and financial institutions allow for direct deposit. For more information regarding direct deposit, you can access your account online at www.disneyshareholder.com or you can contact us at our toll free number: 1-855-553-4763. Although the amount of your dividend may be negligible, we encourage you to keep your account up to date by cashing your check. There are abandoned property laws that require us to remit dividends and stock holdings for inactive accounts.

Q: How can I enroll in Direct Deposit? A: Most domestic banks and financial institutions allow for direct deposit.

  • You can enroll on our transfer agent’s quick access site .
  • You can access your account online at www.disneyshareholder.com
  • You can contact us at our toll-free number: 1-855-553-4763

Q: How can I have my dividend reinvested? A: Dividend reinvestment is offered through The Walt Disney Company Investment Plan. Please review the Plan Prospectus at www.disneyshareholder.com prior to enrolling.

  • You can access your online account at www.disneyshareholder.com to enroll, or

Q: I never received my dividend check, how do I request a replacement? A: Please allow the post office at least 10 mailing days to deliver your check.

If you never received your check or it was misplaced, you will need to request a replacement. You can request a replacement by accessing your account online at www.disneyshareholder.com .

You may also contact our transfer agent, Computershare Investor Services, to request a replacement check. Computershare’s contact information is located in the Transfer Agent section of this FAQ. If you are submitting your replacement request in writing, at least one of the registered owners must sign the letter. Replacement checks are mailed within 7-10 business days once a request has been submitted.

Stock Split History

Q: When has Disney stock split? A:

Shareholder Benefits

Q: Do you have a shareholder benefit program? A: No, we do not have a shareholder benefit program.

Financial Publications

Q: How can I obtain a copy of your Annual Report or Proxy Statement? A: The Annual Report and Proxy Statement are available in the Reports section of this website to view, download and print.

Q: How can I obtain SEC documents such as a prospectus, a 10-K, or a 10-Q? A: SEC documents are accessible under the ‘ Reports ‘ section of the site.

Disneyland Paris (Euro Disney Stock)

Q: How do I receive financial information regarding Euro Disney? A: The French company Euro Disney S.C.A., parent company of Euro Disney Associés S.C.A., operator of Disneyland Resort Paris, is no longer publicly traded and was delisted from Euronext Paris in June 2017. In June 2017, subsidiaries of The Walt Disney Company acquired all remaining shares of Euro Disney S.C.A. at €2.00 per share through a tender offer and subsequent mandatory buy-out. Legacy shareholders of Euro Disney S.C.A. should contact their respective bank or financial intermediary with any questions regarding these transactions.

Historical Financial Information

Q: Where can I find Historical Financial Information? A: On this website you can access the latest — as well as historical — annual report , proxy statement and earnings press releases .

Shareholder Replacement Checks

Q: Who should I contact regarding replacement checks? A: You can request a replacement by accessing your account online at www.disneyshareholder.com .

You may also contact our transfer agent, Computershare Investor Services, to request a replacement check. Computershare’s contact information is located in the Transfer Agent section of this FAQ. If you are submitting your replacement request in writing, at least one of the registered owners must sign the letter.

Replacement checks are mailed within 7-10 business days once a request has been submitted.

Transfer Agent

Q: Who is the transfer agent? A: Computershare Investor Services (“Computershare”) is the Stock Transfer Agent and Registrar for The Walt Disney Company.

Written Inquiries: Computershare Investor Services PO BOX 43013 Providence, RI 02940-3013

Phone: 1-855-553-4763 Toll: 1-781-575-3335

Website: www.disneyshareholder.com Email: [email protected]

Overnight Mail: Computershare Investor Services 150 Royall Street Suite 101 Canton, MA 02021

Escheatment and Unclaimed Property

Q: What is unclaimed property? A: Unclaimed property is any financial asset being held for a person or an entity that either cannot be found, or with whom contact has not been established for a fixed period of time (generally 3 or 5 years). Financial assets include uncashed dividend checks, shares of stock, and other investment assets.

Q: How does property become “inactive?” A: In accordance with unclaimed property laws, property may become “inactive” (and presumed to be abandoned by the owner) when the owner of the property (in this instance, shareholders in The Walt Disney Company) has either not cashed dividend checks issued to them, not been in contact with Disney or its transfer agent, Computershare Investor Services, for the last 3 to 5 years and/or has changed addresses without providing notification, thus resulting in the return of mail being sent to the shareholder through the U.S. Postal Service.

States require that business entities review their records each year to determine whether they are in possession of any unclaimed funds (including uncashed dividend checks), stock or other securities or other property which is inactive and presumed to be abandoned, and to report and deliver such property to the states for safekeeping. The state(s) holds the property, or its cash equivalent, until such time as they are claimed by the owner or legal claimant.

In general, property that is presumed abandoned is transferred to the state of last known address of the shareholder according to the company’s shareholder records. After property has been transferred to the state as abandoned property, shareholders must directly contact the state in order to reclaim their property. Links to individual state unclaimed property programs may be found by visiting: www.unclaimed.org .

Q: Can the state take my shares if I hold a certificate? A: Yes, your stock and any uncashed checks in your account are reported to the state if the account is not kept active. Such reporting causes outstanding certificates in your possession to be cancelled and reissued in the name of the State. If this happens, the state may sell your shares. States may not notify you prior to selling your shares, and you may only be entitled to receive the sale proceeds from the state when you claim the property.

Q: How should I respond if I have received a Due Diligence Letter? A: In accordance with the states’ unclaimed property laws, efforts to locate owners are generally required prior to the transfer of property into a state’s custody, typically by mailing what is known as a “due diligence” letter to the last known address on the company’s shareholder records. Upon receipt of this letter, it is very important that you immediately communicate with our stock transfer agent (Computershare Investor Services), in order to re-establish contact between you and Disney, update the status of your account, and stop the transfer of your assets to the state. If you do not respond to the due diligence letter or otherwise demonstrate contact with your account, your stock and any uncashed dividend checks previously issued to you will be required to be turned over to the state, which may sell your shares without any further notice to you.

You can contact Computershare by responding to a due diligence letter via first class mail or other priority mail service, contacting a client service representative by calling 1-855-553-4763, or logging onto www.disneyshareholder.com to authenticate your identity and demonstrate your control over your account and that it remains active. You can also request replacement of any uncashed dividend checks previously issued to you by calling 1-855-553-4763.

Q: How can I keep my account active in the future? A: It is recommended that you periodically make contact with Computershare to keep your account status current. This is particularly important for accounts with shares deposited in The Walt Disney Company Investment Plan, since the automatic reinvestment of dividend payments is not recognized by the states to be an owner-initiated transaction that will prevent the shares from being presumed abandoned. You can keep your account active and avoid presumed abandonment of your stock in a number of ways, including:

  • contact our call center to request a statement be mailed to the address of record;
  • log in to your online profile by visiting www.disneyshareholder.com and review past transactions, download tax information, or update your account information;
  • vote your proxy;
  • cash a dividend payment;
  • make an additional investment in Disney shares.

Adjusted Cost Basis

Q: How can I determine the cost basis for my investment? A: Cost basis information will be included on IRS Form 1099-B following a sale of “covered” shares.

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How to Market Sustainable Products

  • Frédéric Dalsace
  • Goutam Challagalla

company prospectus benefits

Many companies overestimate customers’ appetite for sustainable products, flooding the market with offerings that don’t sell. The reality is, social and environmental benefits have less impact on purchasing decisions than basic product attributes do. Consumers buy products to get specific jobs done, and only after they find something that will do that will they look for a product that provides some social or environmental advantage.

Of course, that’s only if they value sustainability. Not everyone does, and marketers need to recognize that. Some customers (greens) place a premium on it, some (blues) value it only moderately, and some (grays) don’t care about it and view it skeptically. The three segments cannot all be approached in the same way. How sustainable product benefits interact with traditional benefits is also critical: They can have no impact on a product’s performance (independence), diminish it (dissonance), or enhance it (resonance). Marketers need to follow different playbooks for independent, dissonant, and resonant products, tailoring their approaches to green, blue, and gray customers with each.

Three paths to success

Idea in Brief

The problem.

Many companies overestimate consumers’ appetite for sustainable products, flooding the market with offerings that don’t sell well.

The Opportunity

By understanding how sustainability features interact with a product’s core benefits, companies can devise effective marketing strategies for different consumer segments.

The Solution

Assess whether your sustainable offering’s performance is equivalent, inferior, or superior to that of conventional alternatives. Tailor marketing messages to customers according to how they value sustainability versus traditional attributes.

When companies market the sustainability features of their offerings, they often overlook a fundamental truth: Social and environmental benefits have less impact on customers’ decisions than basic product attributes do. With any purchase, consumers are first trying to get a specific job done. Only after they find something that will help them do that job—and only if sustainability is important to them—will they look for a product that in addition confers a social or environmental advantage. No one decides to buy a chocolate bar to, say, improve the working conditions of farmers on the Ivory Coast. People buy chocolate, first and foremost, because they want to indulge in a small pleasure. No one decides to buy an electric car to prevent climate change. People buy cars because they need transportation; reducing their carbon footprint is an ancillary benefit.

  • FD Frédéric Dalsace is a professor of strategy and marketing at IMD.
  • GC Goutam Challagalla is a professor of strategy and marketing at IMD.

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TODO:

We are the world’s leading automotive distributor with a long track-record of building OEM brands, and a specialism in higher growth markets. We are dedicated to responsible business, driving growth of profits and cash flow, and delivering highly attractive returns for shareholders.

Highlights 2022

Investment case.

In addition to our growth ambitions, the business is asset-light with a long history of disciplined capital allocation and delivering highly attractive returns to shareholders.

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2021 Capital Markets Day

View the event webcast with presentations from a range of Inchcape’s central and regional management.

2022 Annual Report

company prospectus benefits

Investor Contacts

Head of Investor Relations

Related pages

2022 financial performance, financial calendar.

White House wades into debate on ‘open’ versus ‘closed’ artificial intelligence systems

President Biden.

The Biden administration is wading into a contentious debate about whether the most powerful artificial intelligence systems should be “open-source” or closed.

The White House said Wednesday it is seeking public comment on the risks and benefits of having an AI system’s key components publicly available for anyone to use and modify. The inquiry is one piece of the broader executive order that President Joe Biden signed in October to manage the fast-evolving technology.

Tech companies are divided on how open they make their AI models, with some emphasizing the dangers of widely accessible AI model components and others stressing that open science is important for researchers and startups. Among the most vocal promoters of an open approach have been Facebook parent Meta Platforms and IBM.

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Biden’s order described open models with the technical name of “dual-use foundation models with widely available weights” and said they needed further study. Weights are numerical values that influence how an AI model performs.

When those weights are publicly posted on the internet, “there can be substantial benefits to innovation, but also substantial security risks, such as the removal of safeguards within the model,” Biden’s order said. He gave Commerce Secretary Gina Raimondo until July to talk to experts and come back with recommendations on how to manage the potential benefits and risks.

Now the Commerce Department's National Telecommunications and Information Administration says it is also opening a 30-day comment period to field ideas that will be included in a report to the president.

“One piece of encouraging news is that it’s clear to the experts that this is not a binary issue. There are gradients of openness,” said Alan Davidson, an assistant Commerce secretary and the NTIA’s administrator. Davidson told reporters Tuesday that it’s possible to find solutions that promote both innovation and safety.

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Woman eating takeaway food while working on her laptop

Working from home can bring big health benefits, study finds

A review of 1,930 papers into home working found major pluses, but also downsides such as antisocial hours and being overlooked for promotion

Working from home allows people to eat more healthily, feel less stressed and have lower blood pressure, according to a large-scale review of academic literature on post-pandemic workplaces.

Yet remote workers are also more likely to eat snacks, drink more, smoke more and put on weight, the study found. And employers who believe that people working from home are lazy should think again – they are less likely to take time off sick, tend to work longer hours and to work evenings and weekends.

The review , funded by the National Institute for Health and Care Research Health Protection Research Unit in Emergency Preparedness and Response – a partnership between the UK Health Security Agency, King’s College London, and the University of East Anglia – considered 1,930 academic papers on home working, teleworking and other types of hybrid and home working in an effort to distil the often contradictory research.

Prof Neil Greenberg, a psychiatrist at King’s College London and one of the study’s authors, said the study showed that workers and employers needed to start considering home working with the same seriousness as they did office working.

“In the old days of office working, people realised that if you put everyone in the same room with no sound-proofing, it was all unpleasant and you didn’t have a very productive workforce,” he said.

“Now that we’ve shifted to a home working culture, it makes sense for organisations and the government to make sure that people who are home working are doing it in as effective a way as possible.”

The review, published in the Journal of Occupational Health , identified three themes – the working environment at home, the effect on workers’ lives and careers, and the effect on their health. Greenberg said the research showed that there were winners and losers in many areas of home working. The working environment depended on how much space there was at home, the available equipment and on how much control workers had over their day.

People on higher incomes often enjoyed home working more, but those with more responsibilities at home such as childcare or housework – often women and those living alone – tended to be more stressed.

“Overall, people felt more productive at home,” Greenberg said. “It was particularly good for creative things, but much more difficult dealing with tedious matters. A lot of people worried about career prospects – this feeling that if you’re not present in the office, you’re going to get overlooked.”

Effects on health were clearer. The transition to home working during Covid was linked “with an increase in intake of vegetables, fruit, dairy, snacks, and self-made meals; younger workers and females benefited the most in terms of healthier eating,” the paper said.

One of the studies reviewed found that 46.9% of employees working from home had gained weight, and another put the figure at 41%. Most of the papers reviewed showed that homeworkers were more sedentary.

Greenberg said: “Managers needed to think about finding ways to support their homeworkers and help create their working environment.

“There’s a great adage in science that at some point, we need to stop admiring the problem and actually think about solutions,” he said. “We know quite a lot now. So we need to ask ‘what is the best training for an individual who’s going to become a partial homeworker?’ What we don’t need to do is to ask ‘would it be helpful to train someone to homework?’ The answer is clearly yes.”

Since the end of Covid restrictions in 2022, some companies have insisted that employees return to the office full-time, with firms such as JP Morgan requiring managers to be in five days a week.

“If companies like JP Morgan are afraid that people at home will be slacking, or won’t be doing a good job, and they can’t keep an eye on them, then I think that is an outdated concept,” Greenberg said.

Refusing WFH options will mean that talented employees may find other jobs, and makes companies less flexible in the event of future crises, such as another health emergency or strikes or severe weather conditions that prevent people from reaching their offices, he added.

“If they are doing it merely out of fear, then they risk being left behind,” he said. “We looked at a huge amount of evidence of the years and what our review shows is that there are ways to make the home working approach actually work well for the organisation and also for the employee.”

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