Statement in lieu of Prospectus
The statement in lieu of prospectus is a document issued by the company when it does not offer its securities for public subscription. The Statement in Lieu of Prospectus is a document filed with the Registrar of the Companies (ROC) when the company has not issued prospectus to the public for inviting them to subscribe for shares. Its objective is to be filed with the registrar if the company does not issue prospectus.
It is mandatory for the Public Limited Company to distribute the Prospectus but it is not compulsory in all aspects. It is also possible to adopt an alternative to the prospectus. It is not necessary to distribute prospectus for the company if the directors are able to raise the required funds by selling the shares and debentures to their friends and relatives. If the company used the alternative of the prospectus, it will be necessary to submit that copy to the registrar. It is called substitute prospectus or substitute circular. This substitute holds all the items that are being required in the original prospectus and it needs to be signed or attested by the directors.
A statement in lieu of prospectus contains the following information
- Name of company
- Account of capital
- Explanation of the business
- Names, addresses, and occupations of directors
- Probable preliminary expenses
- Names of vendors and information of property
- Substance contracts
- Director’s interests
- Least subscription