Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting for Shares

Question:
Which document is prepared by the company as an invitation to the public to subscribe for company's share?
Options:
Memorandum of association
Articles of association
Prospectus
None of these
Correct Answer:
Prospectus
Explanation:
A document issued by a company to invite the public and the investors for subscribing the securities is called a prospectus. The prospectus contains detailed information on the securities. A public company can issue the prospectus to offer its shares and debentures, whereas a private company cannot issue prospectus.