ABSTRACT
One of the major economic justifications for the company is that it provides a mechanism for facilitating business ventures. Suitable arrangements must, however, be made to provide the company with capital to undertake its business ventures. Sometimes, even though rarely, a company may be formed to undertake a large-scale business venture. Where this happens it may be difficult to raise private capital and thus it becomes necessary for the company to offer its securities (its shares or debentures) to the public. More often than not, however, it is existing companies which undertake new business ventures and which find it necessary to offer shares and debentures to the public in order to obtain the additional capital it may require to finance the venture. This chapter examines the requirement to provide a prospectus where a company proposes to use its securities to raise capital from the public.
