Formalities such as issue of prospectus and underwriting are not required for raising loans from a bank.

True

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False

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State with reasons whether the following statements are True or False:

A public company need not issue prospectus for raising capital.

Mr. Sahil and Mr. Rajesh are promoting a new company. They are not able to decide on how to raise funds. Sahil is interested in a new issue through the prospectus, while Rajesh wants a rights issue. As a financial manager, suggest the appropriate step to Sahil and Rajesh.

Is it essential for a private company to issue a prospectus or a statement in lieu of prospectus? Why or why not?

A private company does not issue prospectus.

Q. A public company with share capital is required to file a document with the Registrar of
Companies in case it does not want to make a public issue through prospectus. Name this
document

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