Target Exam

CUET

Subject

-- Accountancy Part A

Chapter

Accounting for Shares

Question:

Which document invites the public that a new company has come into existence and it needs funds for doing business?

Options:

Register of company

Certificate of registration

Certificate of incorporation

Prospectus

Correct Answer:

Prospectus

Explanation:

The correct answer is option 4- Prospectus.

The company first issues the prospectus to the public. Prospectus is an invitation to the public that a new company has come into existence and it needs funds for doing business. It contains complete information about the company and the manner in which the money is to be collected from the prospective investors.