Section 40 (1) of the Companies Act provides that
“Every prospectus issued or on behalf of a Company or or on behalf of any person who is or has been engaged or interested in the formation of the Company, shall state the matters specified in Part I of the Third Schedule and set out the reports specified in Part II of that Schedule…..”
Part I of the schedule contains the following matters
• Number of founders, management or deferred shares if any.
• Share qualification of directors if any
• Names, postal addresses and occupation of directors and proposed directors
• Minimum subscription.
• Time of opening of the subscription lists.
• Amount payable on application and allotment.
• Particulars of options on shares and debentures
• Particulars of shares and debentures payable otherwise than for cash.
• Particulars of persons who have sold assets to the company
• Amount paid to such persons for assets including any amount payable for purposes of goodwill
• Commission paid the company.
• Preliminary expenses or an estimate thereof.
• Amount if any paid to promoters
• Particulars of material contracts entered into the company in the ordinary course of business
• Names and postal address of auditors if any
• Directors interest, if any in the promotion of the company or its property.
• Voting and class rights
• Length of time the company has carried on the business if less than 3 years.
Part II of the schedule sets out the following reports
• An auditors report with respect to
• Profit or losses in each of the last 5 years.
• Rate of dividend in each of the last 5 years.
• Assets and liabilities as at the last date of accounts
• And similar information on the Company‟s subsidiaries if any
• In the proceeds of the issue or any part thereof is to be applied directly or indirectly in the purchase of any business, a report named accountants on the profit or losses of the business in each of the last 5 years.
• Assets and liabilities of the business as at the last date of accounts.
• If the proceeds of the issue or any part thereof is to be applied directly or indirectly in the acquisition of share in a subsidiary, a report named accountants on the profit or loss of the Company in each of the last 5 years.
• Assets and liabilities as at the last date of accounts.
And similar information on the subsidiaries of the Company if any