Statement in lieu of prospectus
If the promoters of a public company hope to get the subscription of capital from their own limited circle there is prospectus to the public. The promoters shall have to file ‘a statement in lieu of prospectus.
According to section 53 of the company’s ordinance. If a public company is not issuing a prospectus on its formation. It then must file a statement in lieu of Prospectus with the Registrar of the companies. A statement in lieu of prospectus is defined as ‘a public document prepared in the second schedule of companies ordinance by every such public company which does not issue a prospectus on its formation by filing with the registrar before allotment or shares of debentures, and signed by every person who is named therein’. A statement in lieu of prospectus gives practically the same information as a prospectus and is signed by all the directors or proposed directors. In case the company has not filed a statement in lieu of prospectus with the registrar, it is then not allowed to allot any of its shares or debentures.
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A statement in lieu of prospectus contains the following information
- Name of company
- Statement of capital
- Description of the business
- Names, addresses and occupations of directors
- Estimated initial expenses
- Names of vendors and details of property
- Material contracts
- Director’s interests
- Minimum subscription