# Prospectus — Definition, Types and Contents

## Definition — Section 2(70)

A prospectus is:

> "Any document described or issued as a prospectus and includes:

> - a red herring prospectus,

> - a shelf prospectus, 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."

### Breaking it down:

A prospectus has two limbs:

(a) Means:

Any document described or issued as a prospectus

(b) Includes:

Shelf prospectus (Section 31) — a single prospectus filed in advance, valid for multiple issues over up to one year (used by certain classes of companies/banks)
Red Herring Prospectus (Section 32) — issued before the issue, missing the price/quantum details (the final price is discovered through book-building)
Any notice, circular, advertisement, or other document inviting offers from the public

### Key tests

For a document to be a prospectus:

1. It must invite offers from the public

2. The offer must be for subscription or purchase of securities

3. The securities must be of a body corporate

A private circular to a small select group is NOT a prospectus (it's a private placement).

## Contents of Prospectus — Section 26

Every prospectus must contain prescribed contents. Visual breakdown:

### 1. Dated

Every prospectus must be dated. The date appearing on the prospectus is deemed to be the date of publication of the prospectus.

### 2. Registered

The prospectus must be filed with ROC on or before its issue to the public. A copy is delivered to ROC.

### 3. Cover Page

Must have prescribed cover page disclosures.

### 4. Signed

Must be signed by:

Directors, or
Proposed directors, or
Their duly authorised attorneys

### 5. List of documents submitted to ROC must be mentioned.

### 6. Information [Section 26(1)]

Detailed disclosures about the company, its business, capital structure, terms of issue, etc.

### 7. Reports [Section 26(1)]

Financial and other prescribed reports — e.g., auditor's report on profits/losses, assets and liabilities.

### 8. Expert's Report (Statements by Experts)

If any expert's statement is included in the prospectus, the expert must:

Not be engaged or interested in the formation, promotion, or management of the company
Have given written consent to the issue of the prospectus with the statement
That consent must not have been withdrawn before the prospectus is delivered to ROC

Who is an "expert"? — Engineer, valuer, accountant, lawyer, etc.

## Summary Visual

```

PROSPECTUS

----------

MEANS INCLUDES

----- --------

Any document Shelf Prospectus (S.31)

described or Red Herring Prospectus (S.32)

issued as a Notice/Circular/Advertisement/

prospectus other document inviting offers

from the public

```

Worked example

### Example 1

Example 1 — Is it a prospectus?

ABC Ltd publishes a newspaper advertisement inviting the public to subscribe to its debentures. This is a prospectus (notice/advertisement inviting public to subscribe to securities — falls under 'includes').

### Example 2

Example 2 — Not a prospectus:

XYZ Pvt Ltd sends a letter to 50 identified individuals offering shares. This is NOT a prospectus — it is a private placement because there's no public invitation.

### Example 3

Example 3 — Red Herring Prospectus:

A company plans an IPO using book-building. Before the issue, it files a Red Herring Prospectus which contains all information except the price/quantum. The final price is discovered through bidding.

### Example 4

Example 4 — Shelf Prospectus:

A Public Financial Institution (PFI) wants to raise debt in multiple tranches over a year. It files a Shelf Prospectus (Section 31) once and uses it for multiple issues without re-filing.

### Example 5

Example 5 — Expert Consent:

ABC Ltd issues a prospectus including a valuer's report on its land. The valuer must (i) be independent — not connected with formation/management, (ii) give written consent, and (iii) not have withdrawn that consent before the prospectus is filed with ROC.

### Example 6

Example 6 — Date deemed:

ABC Ltd's prospectus is printed on 15 March, dated '20 March 2026', and physically distributed to the public on 25 March. The deemed date of publication is 20 March 2026 (the date on the prospectus).

⚠️ Common exam mistakes

Thinking any document offering shares is a prospectus — public invitation is essential.
Confusing Shelf Prospectus (S.31) with Red Herring Prospectus (S.32) — Shelf is for multiple issues over time; RHP is for a single issue without price details.
Forgetting that an expert's consent must NOT have been withdrawn before delivery to ROC.
Believing an expert can be engaged in the company's formation — they must be INDEPENDENT.
Missing the requirement that the prospectus must be registered with ROC BEFORE issue to public.
Confusing date of printing with date of publication — the prospectus DATE is the deemed publication date.

Bare-Act text Sections 2(70), 26, 31, 32 · Companies Act, 2013 · click to expand

Section 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. Section 26: Matters to be stated in prospectus.

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Prospectus - Definition, Types and Contents (Section 26)

Worked example

⚠️ Common exam mistakes