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      Question

      Under the Companies Act, 1956, a "Prospectus"

      is:
      A A confidential memo circulated only among the promoters of a company Correct Answer Incorrect Answer
      B A document inviting the public to subscribe to or purchase shares or debentures Correct Answer Incorrect Answer
      C A final liquidation report submitted to the Court after a company is dissolved Correct Answer Incorrect Answer
      D An internal ledger used for the daily recording of business transactions Correct Answer Incorrect Answer
      E A formal roster containing the names and addresses of all board members Correct Answer Incorrect Answer

      Solution

      Section 2(36) of the Companies Act, 1956, defines prospectus as "any document described or issued as a prospectus and any other document by which the offer of any securities is made to the public for subscription or purchase." It must contain specified particulars (under Sections 58-59) about the company, directors, auditors, financial history, and risk factors.

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