Prospectus. Image credit docstoc.com

Prospectus. Image credit docstoc.com

ZIMSEC O Level Commerce Notes: Prospectus(privatised)

 

Prospectus

  • Is prepared by founders of the company or an issuing house after the registration of a public limited company.
  • Is sent for approval to the registrar of companies before members of the public are invited to subscribe for shares.
  • Issued to members of the public by public limited companies only.
  • Contains the following:
  • an application form for members of the public who wish to buy shares.
  • A closing date for the application.
  • A narration of the history and background of the company up to present time.
  • A summary of the future plans of the company.
  • The current financial position of the company.
  • The profit record of the company.
  • The number of shares to be sold to the public.
  • The price for each share.
  • A statement to the effect that a request has been made for permission to quote shares on the stock exchange.

Importance:

  • acts as an invitation (advertisement) to members of the public to buy shares.
  • Useful to an investor who wants to assess his risk in making an application to buy shares.

To access more topics go to the Commerce Notes page.

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