COMPANY

PROSPECTUS
.
 PROSPECTUS
COMPANIES ORDINANCE, 1984 DEFINITION:
Prospectus means any document described or issued as
prospectus and includes

• any notice, circular, advertisement or any other

communication, inviting offers from the public for the
subscription or purchase of any shares in or debentures of,
body corporate, inviting deposits from the public other than
deposits invited by a banking company or a financial
institution approved by the Federal Government whether
described as prospectus or otherwise.
 PROSPECTUS
MEANING:
• Company prospectus is released by company to inform the public
and investors of the various securities that are available. These
documents describe about mutual funds, bonds, stocks and other
forms of investments offered by the company. A prospectus is
generally accompanied by basic performance and financial
information about the company.

• Prospectus is a formal legal document, which is required by and filed

with the SECP that provides details about an investment offering for
sale to the public, it should contain the facts that an investor needs
to make an informed investment decision
 PROSPECTUS
CONCLUSION:

Prospectus is a mandatory document for limited organization

to commence their business, but its complicated procedure
delays the operation of any business, therefore a no. of
organizations hesitate to issue Prospectus to general public
for subscription of share capital & Debenture.
 PROSPECTUS

WHICH COMPANIES ARE REQUIRED TO ISSUE PROSPECTUS

• Every public listed company who intends to offer shares

or debentures of the company to the public.

• Every private company who ceases to be a private

company and converts into a public company and intends
to offer shares or debentures of the company to the
public.
 CONTENTS OF PROSPECTUS
1. The contents of the Memorandum with the particulars of
signatories and number of shares subscribed by them.

1. The number and value of shares.

1. Description of business to be undertaken and its prospects.

1. Any provision in the articles relating to remuneration of

directors and chief executives.
 CONTENTS OF PROSPECTUS

6. The amount of minimum subscription.

7. The date and time of the opening and closing of the

subscription list.

8. The amount payable on application for each share.

9. The number, description and amount of share capital issued

within the two preceding years along with the amount of
premium or discount, if any.

10. Name of the underwriters, if any along with opinion of directors

as to financial soundness of underwriters.
 CONTENTS OF PROSPECTUS

11. The name and address of auditors and legal advisors.

12. The amount of preliminary expenses.

13. The right of voting at meeting s of the company.

14. Particulars of capitalization of any reserves or profits if any.

15. Particulars of surplus on revaluation of the assets and the

manner in which such surplus has been applied, adjusted or
treated.
 REQUIREMENTS OF PROSPECTUS
1. Prospectus must be dated i.e. publication date. (Sec. 52)

2. It must include an auditor’s report on last five years profit and loss account
and on balance sheet at last date on which accounts were prepared being a
date not more than 120 days before the date of issue of the prospectus.

3. It must be issued/published not less than seven or more than thirty days
before the subscription date. (sect.53(2))

4. If prospectus includes a statement made by an expert, the expert must not

be engaged or interested in the formation or promotion or in the
management of the company. A written consent of the expert should also be
obtained before the issue of prospectus with the statement. (sect. 54 & 55)

5. In case of a listed company approval of the SECP must be obtained within

sixty days before the date of issue of prospectus. However, Commission may,
impose such conditions as it may deem necessary. (sect 57 (1) & (2))
 Cont’d
6. A copy of prospectus must be sent to the registrar before the issue of
prospectus. (sect 57 (3))

7. Registrar shall not register the prospectus unless the above requirements
have been complied with.

8. A sufficient number of copies of the prospectus issued under sub-section

(1) of section 53 shall be made available at the registered office of the
company with the stock exchange at which the company is listed or is
proposed to be listed and with the bankers to the issue and the
prospectus in its full text or in such abridged form as may be prescribed
shall be published at least in one Urdu and one English daily newspaper
having circulation in the province where stock exchange is situated at
which the company is listed. (sect 53 (1A))
 EXPERTS OPINION

1. Expert includes an engineer, a valuer, an accountant, or every other

person whose profession gives authority to any statement made by him.

2. Experts written consents are required to be obtained which are not

withdrawn before the issue of prospectus.

3. Statement is required to be included in the prospectus that experts have

given and not withdrawn their consents.

4. An expert shall not be a person engaged or interested in the formation

or in the management of the company.
 DOCUMENTS REQUIRED

DOCUMENTS REQUIRED TO BE ATTACHED TO THE PROSPECTUS:

1. Consent of expert required under section 55; and

2. In the case of a prospectus issued generally;

a copy of contracts regarding remuneration of Chief Executive etc and in case

of an unwritten contract, a memorandum thereof, and

a report from the auditors regarding any adjustments to assets and liabilities of
the company and reason thereof.
 STATEMENT IN LIEU OF
1.
PROSPECTUS
It is a statement which is delivered by a company, having share capital to
the Registrar for registration, at least three days before the first allotment
of shares or debentures under the following conditions:

• Where a company does not issue prospectus; or

• Where a company has issued a prospectus but has not proceeded to allot
any of its shares offered to the public for subscription.

• SILOP is to be signed by every person who is named therein as a director

or a proposed director of a company.

• Where a company which is required to submit a SILOP does not comply

with the requirement, it can not allot shares. (section 69(1))
 CONTENTS OF STATEMENT IN LIEU
OF PROSPECTUS
1. The name of the company.

2. The nominal share capital of the company divided into number of ordinary
shares and par value per share.

3. Description of the business to be undertaken and its prospects.

4. Names, addresses, description and occupations of the proposed or

appointed directors , chief executive, managing agent and secretary of the
company.

5. Provisions regarding the appointment and remuneration of the above

officers of the company.
Cont’d

5. Voting rights in the meetings of the company.

6. Numbers and the amount of shares and debentures agreed to be issued.

7. Names, occupation and addresses of vendors of property purchased or

proposed to be purchased by the company.

8. Amount payable in cash, shares or debentures, to each vendor of the

property.
 DIFFERENCES B/W
PROSPECTUS AND SILOP
STATEMENT IN LIEU OF PROSPECTUS:
PROSPECTUS :

1. Filed by a public listed company. 1. Filed by a public unlisted

company.
2. Has been defined in definitions
2. Has NOT been defined in
Sec. 2 (29)
definitions.
3. Submitted to registrar, 3. Submitted only to registrar.
commission and shareholders. 4. Is not an invitation of
subscription.
4. Is a document containing an
advertisement for invitation of
subscription from the public.
 DIFFERENCES B/W
PROSPECTUS :
PROSPECTUS AND SILOP
STATEMENT IN LIEU OF PROSPECTUS:

5. Approval of commission must be

obtained within 60 days before the 5. Is not a kind of advertisement for
issue of prospectus. invitation of subscription.

6. No prescribed form is specified in 6. Is filed on prescribed form.

this Ordinance.

7. No prospectus shall be issued 6. It is filed with the registrar

unless before the date of its concerned at least 3 days before
publication, a copy signed by the the first allotment of shares
directors or their agent has been
delivered to the registrar