# Definition of Prospectus [Section 2(70)]

## Statutory Definition

A prospectus is any document described or issued as a prospectus AND includes:

1. Red Herring Prospectus (RHP)

2. Shelf Prospectus

3. Deemed Prospectus — any notice, circular, advertisement, or any other document that invites offers from the public to subscribe to or purchase securities of a body corporate

## Three-Part Test

A document is a prospectus if it:

1. Invites offers from the public

2. To subscribe or purchase securities

3. Of a body corporate

## Types Explained

### Red Herring Prospectus

Issued prior to a public offer
Does NOT contain complete particulars on the quantum or price of securities
Filed with ROC before the offer opens

### Shelf Prospectus

A prospectus filed with the ROC at the stage of first issue
Subsequent issues during validity period need only an Information Memorandum
Saves time and cost for repeat issuers

### Deemed Prospectus

Any document with an invitation to the public — even if not titled as 'prospectus' — is deemed to be a prospectus. The substance prevails over form.

## Visual

```

PROSPECTUS (Sec 2(70))

├── Red Herring Prospectus (price/quantum not final)

├── Shelf Prospectus (one filing, multiple issues)

└── Deemed Prospectus (any document inviting public)

```

## Key Insight

If you call a document by any name BUT invite the public to subscribe to securities, the law treats it as a prospectus and applies all compliance requirements (signing, ROC filing, content disclosures, liability).

Worked example

### Example 1

Example 1: ABC Ltd issues a newspaper advertisement inviting the general public to subscribe to its debentures. Is this a prospectus?

Answer: Yes — it is a deemed prospectus under Section 2(70). The advertisement invites public subscription, hence all prospectus requirements (Section 26 disclosures, ROC filing, etc.) apply.

### Example 2

Example 2: XYZ Ltd files a document with ROC describing its issue but does not mention the issue price or number of shares to be issued. What type of prospectus is this?

Answer: This is a Red Herring Prospectus — filed before the public offer with incomplete details of quantum/price. Final price and quantum are settled later before the offer closes.

⚠️ Common exam mistakes

Thinking only documents titled 'prospectus' qualify — the 'deemed prospectus' concept captures any document inviting the public.
Confusing Shelf Prospectus with Red Herring — Shelf saves time for multiple issues; Red Herring lacks price/quantum.
Missing the 'body corporate' element — invitation must relate to a body corporate's securities.

Bare-Act text Section 2(70) · Companies Act, 2013 · click to expand

2(70) "prospectus" means 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.

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