Q.State any five matters that the Companies Act, 2013 requires to be disclosed in a prospectus.

A prospectus is required to disclose far more than the mere price of the shares on offer, since an investor is expected to judge the whole company from this one document.

These disclosures together let an investor judge the company's identity, its management, the offer itself, and its financial health without independent investigation.

Section 26 of the Companies Act, 2013 lists, in considerable detail, the matters a prospectus must state and the reports it must set out, because an investor subscribing on the strength of the document has no independent means of verifying the company's affairs before the shares are allotted. Five representative matters are:

1. Company identity and objects - the name and address of the registered office, and the main objects and present business of the company, so an investor knows exactly what business they are funding.
2. Names and consents of key persons - directors, proposed directors, the company secretary, chief financial officer, auditors, bankers and legal advisers, each of whom must give written consent to be named, so that responsibility for the document is clearly fixed.
3. Terms of the offer - the number and class of securities offered, the price or price band, the minimum subscription required, and the dates on which the issue opens and closes.
4. Capital structure - the authorised, issued, subscribed and paid-up capital of the company, along with details of existing borrowings, so investors can judge how their money fits into the company's overall financing.
5. Financial reports - audited figures on profits or losses and assets or liabilities for each of the preceding five financial years, prepared specifically for inclusion in the prospectus.

Beyond these five, the Act also requires disclosure of risk factors specific to the business, particulars of pending litigation, and the stock exchanges where listing is proposed. Omitting any required matter, or misstating one, is not a mere drafting slip - it exposes the company and the persons responsible to civil liability under Section 35 and criminal liability under Section 34.

Students frequently list only the price and dates of the offer and forget non-financial disclosures like risk factors, litigation particulars and the five-year financial reports, which examiners specifically look for.