DEEKSHITH KUMAR PUTTUR

Prospectus is a document containing detailed information about the company and an invitation to the public subscribing to the shares capital and debentures. It is a document that invites the public to subscribe to the securities of a body corporate. In private companies, it is called private placement from its relatives and friends, because a private company by definition is not allowed to invite subscriptions from the public.  Prospectus is not an offer in itself, but an invitation to make an offer. Section 2(70) of the Companies Act, 2013 defines Prospectus as “Any document described or issued as a prospectus and includes a red herring prospectus referred to in Section 32 or shelf prospectus referred to in Section  31 or any notice, circular, advertisement or other document inviting offers from the public for the subscription or purchase of any securities of a body corporate.” By this definition it can concluded that, any document inviting offers from the public for the subscription

Share capital of a company refers to the amount invested in the company for it to carry out its operations. In other words it refers to the amount of capital raised or to be raised by a company though the issue of shares. A share is the interest of a member in a company.  According to Section 2(84) of the Companies Act, 2013 “share” means a share in the share capital of a company and includes stock. It represents the interest of a shareholder in the company, measured for the purposes of liability and dividend. It attaches various rights and liabilities. A share is the smallest unit into which the company's capital is divided, representing the ownership of the shareholders in the company. A stock on the other hand is a collection of shares of a member that are fully paid up. Kinds of Shares As per the Section 43 of Companies Act, 2013, a company can issue only two types of shares.  1. Equity Share Capital [Section 43(i)] All share capital which is NOT preferential share capital is E