Section 40 (1) of the Companies Act requires a prospectus to contain the matters and reports specified in Part I and II of the Third Schedule. Explain these matters as outlined in the Third Schedule.

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

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