When a company gets Certificate of Incorporation

When a company gets Certificate of Incorporation, the ,.1 step before it is to raise the necessary capital to finance its business activities. The promoters of a public company, may collect the necessary funds for the business privately or may raise the money from the general public. However, the required money is generally raised from the public, as the private money may not be sufficient for the needs of the company. The money from the general public is raised by the company by inviting public deposits or by inviting offers for the subscription of its shares and debentures. Such offers from the public may be invited by issuing a document known as ‘prospectus’. The company informs the general public about the company’s business, its financial position. capital structure, directors etc. through prospectus so as to lure them to invest in its shares and debentures. The prospectus, as issued by the company is assumed to have contained the true information about the company. If any mis-statement is contained therein, there are a large number of statutory provisions aimed at their protection. Whenever, the company needs funds for expansion of the company’s business in future, a prospectus may

also be issued to the public.