Question

State the following statement is True or False:

A document prepared not for publicity but for filing with the Registrar is statement-in-lieu prospectus.

• A. True
• B. False

Answer 1

The correct option is A True

Where a public company does not invites public to subscribe for it shares but arrange money from private sources, it needs not issue the prospectus to the public. But the company has to get its prospectus registered three days before the allotment of shares. Thus, the company not inviting public to subscribe, prepare a draft prospectus which contains the information given in schedule III of the act, such a draft prospectus is knows as a statement in lieu of prospectus.