Types of Prospectus
As per the provisions of the Companies Act, 2013, there are majorly four types of prospectus:
1. Deemed Prospectus: Section 25(1) of the Companies Act, 2013 mentions Deemed Prospectus. When a company allows to allot any securities of a company, the document is considered to be a Deemed Prospectus through which the offer is made to the investors.
2. Red Herring Prospectus: It is the prospectus that does not contain all the information regarding the prices of securities offered and the number of securities that are to be issued. As per the provisions of the act, the firm must issue this prospectus to the registrar at least three times before the opening of the offer and the subscription list.
3. Shelf Prospectus: It is stated under Section 31 of the Companies Act, 2013 and is issued when a company or any public financial institution offer one or more securities to the public. A company must provide a period of validity of the prospectus, which shall not be more than one year. An information memorandum must be provided by the organization when filing the Shelf Prospectus.
4. Abridged Prospectus: It is a kind of memorandum that contains all the salient features of the prospectus as specified by SEBI (Securities and Exchange Board of India). Abridged Prospectus includes all the information in brief, which provides a summary to the investor to make further decisions.