Documents Related to Formation of a Company — Secretarial Practice STD 11 Commerce / Arts — Question

• It contains the main contents of a prospectus in brief.
• It is attached with the application form issued.
• It is issued only in case of a public offer.

(ii) Shelf Prospectus:

• It is an alternative option to print a fresh prospectus for every issue of shares.
• It can be used for all further issues made by the company for up to one year.
• However, for every subsequent issue, a company has to file an ‘Information Memorandum’ with ROC.

(iii) Red Herring Prospectus:

• It is a kind of incomplete prospectus.
• It does not include particulars like the number of shares offered and the issue price of the shares offered.
• It is generally issued at the time of Initial Public Offer (IPO) or under Book Building Process.

(iv) Letter of offer:

• It is issued while making the “Right Issue” to the existing shareholders.
• It contains the details of the offer.

(v) Offer letter:
It is issued to a selected group of investors while making a private placement.