Final Project of CORPORATE LAW

2. Final Project of CORPORATE LAW

3. Topic: Prospectus and Promoters presented to:Prof. Amir Fahim

4. Presented By: Muhammad Arslan (11344) UmairJaved (11362) MohsinSiddiq (11340) M. Ali Zaib (11310) Muhammad Usman (11356)

5. PROSPECTUS: • A document prepared by promoters • After the formation of company • To take capital by issuing shares • Data regarding Company’s policy

6. Contents of Prospectus

7. Contents of Prospectus: • The contents of the memorandum • The number and value of the shares • Description of business to be undertaken and its prospectus • Any provision in the articles relating to remuneration of directors & c/e • Particulars of present or proposed directors, c/e, managing agent • Amount of minimum subscription • The date and time of opening and closing of the subscription list • Amount payable on application of each share

8. Contents of Prospectus (Continue): • The number, description, and amount of share capital issued • Name of underwriters if any, • As respect to the property for which the subscription is to be applied, • If amount paid within two preceding years as commission to underwriter • Amount of preliminary expenses • Any amount paid within two preceding years to any promoter • Particulars of any contract entered into for the appointment of C/E, • Name and addresses of the auditors and legal advisor • Full particulars of the nature and interest of every director or promoter

9. Contents of Prospectus (Continue): • Right of the voting at the meeting of the company • The nature and extent of any restriction in the articles • Length of the time from the date of commencement of the business • Particulars of capitalization of any reserves or profits if any. • Particulars of surplus on revaluation of the assets • A reasonable time and place where copies of auditors accounts • Summary in columnar form of the earnings of the company for each of the last three financial year • Pending legal proceedings

10. Other Requirements Relating to Prospectus: • Must be dated • Must include an auditor’s report on last five years • Must be published not less than seven or more than thirty days before the subscription date • If the prospectus includes a statement made by an expert , then written consent of the expert should be obtained • A copy of prospectus must be sent to the registrar • Registrar should not register the prospectus unless the above requirement have been complied • A sufficient number of copies of the prospectus issued • shall be made available at the registered office of the company

11. Documents Which Are Required: • Consent of expert • In case of prospectus issued generally A copy of contract regarding remuneration of chief executive A report from auditors regarding any adjustment to assets and liabilities of the company,

12. Civil Liability for Misstatement in Prospectus:- No person shall be liable for any loss or damages if he proves that • He withdrew his consent to become a director before the issue of prospectus • The prospectus was issued without his knowledge • After the issue of prospectus and before the allotment, he became aware that the prospectus was untrue and withdrew his consent and gave a public notice of the withdrawal • As regards the untrue statement, the expert believes on the reasonable grounds that statement was true, correct and fair representation.

13. Civil Liability of Expert: • Expert civil liability is limited to the opinion given by him in the prospectus. • He is not considered to be a person who has authorized for issue the prospectus. • The expert did not be held liable if he proves the following • That he had given the consent but he withdrew the consent before the prospectus was filled • After registration of prospectus and before allotment of shares he became aware he withdrew his consent • That he believed up to the date of the allotment that the statement was true.

14. Civil Liability of Directors: • Directors civil liability expands to the whole of the issue • The directors shall be responsible for the untrue statement made by the experts in the prospectus • The directors can avoid civil liability if he proves any of the following: • the director had withdrew his consent to become the director • when he became aware of issuance of prospectus; he gave a reasonable public notice of the fact • the statement was true copy or true extract taken from any public official document • extract from the opinion made by any expert and the directors believe that the expert dad sufficient knowledge and ability to express the opinion • Other than the opinion of expert or public official document

15. Special Note for Prospectus:- • Where a prospectus is issued without the knowledge • Or consent of a person specified in the prospectus as a director who was not consented to become a director, • Or an expert who has not given or had withdrawn his consent before the issue of a prospectus, The directors shall be liable to indemnify in respect of all damages

16. Promoters: • Promoters are those persons who take initiative for formation of the company • Arrange all initial procedures like initial capital, management • An entity who takes active steps in the formation, organization, or financing of a corporation