Commercial Correspondence and Secretarial Practice · Ch 6 — Prospectus
Contents of a Prospectus
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Contents of a Prospectus
Section 26 does not leave the contents of a prospectus to a company's discretion - it prescribes, in considerable detail, the matters that must be stated and the reports that must be set out, so that a prospective investor can make an informed decision without needing to investigate the company independently. The matters fall broadly into these groups:
| Category | What must be disclosed |
|---|---|
| Company identity | Name and address of the registered office; objects of the company and its main business activities |
| People behind the issue | Names, addresses and occupations of directors and proposed directors; names of the company secretary, chief financial officer, auditors, bankers, legal advisers, and underwriters, along with their written consent to act |
| The offer itself | Number and class of securities offered, the price (or price band), the minimum subscription, and the dates on which the issue opens and closes |
| Capital structure | The authorised, issued, subscribed and paid-up capital, and details of any existing borrowings |
| Financial position | Reports on the profits/losses and assets/liabilities of the company for the preceding five financial years, prepared by the auditors |
| Risk factors and litigation | Management's own statement of the risks specific to the business, and particulars of any pending legal proceedings against the company or its directors |
| Listing | The names of the stock exchanges where the securities are proposed to be listed |
Definition 1Minimum subscription
The minimum amount that must be subscribed before a company can proceed to allot securities, stated in the prospectus of a company as one o …