Floating a company and brochure
Website design By BotEap.comOnce a business has been registered, it has to take off. This is described as a float of a company. It is true that a company is born once registered and can do business immediately. But a newly formed company often needs to raise enough capital to get off the ground. Promoters have to take the necessary steps to get off the ground. The promoters have to take the necessary steps to obtain working capital for the successful take-off of the business.
Website design By BotEap.comWhen there is an existing business in the form that can be an individual business or a partnership, which is absorbed by the new company, the capital of the previous business becomes part of the capital to put the new company into circulation. Similarly, there is a capital transfer when one company takes over another.
Website design By BotEap.comThere are several ways to float or raise capital for a business. The method is usually affected by the type of company: either private or public.
Website design By BotEap.comPrivate companies generally depend on capital contributions from their shareholders, although new shares can be issued for cash.
Website design By BotEap.comIn addition, capital can be raised through bonds, loans, and overdrafts. It could also float through private placement. On the other hand, public companies can be financed to take off through capital contributions, debentures, loans and overdrafts, and private placements. But in addition, it could invite the public to buy shares and its obligations by listing on the stock market or on the capital market.
Website design By BotEap.comUSER INFORMATION
Website design By BotEap.comA public company invites the public to subscribe for its shares and obligations by issuing a prospectus. Section 48 of the Investments and Securities Act (ISA) establishes that it will not be lawful to issue any application form for securities in a public company unless the form is issued with a prospectus of the company.
Website design By BotEap.comA prospectus is any notice, circular, announcement or other invitation that is offered to the public for the subscription or purchase of shares or obligations of a company.
Website design By BotEap.comThe ISA by section 57 (1) establishes that no prospectus will be issued by or on behalf of a company or in relation to a planned company unless, on or before the date of its publication, a copy has been delivered to the Exchange. of Securities. Commission for registration.
Website design By BotEap.comCONTENT OF A BROCHURE
Website design By BotEap.comAccording to section 50 (1) of the Investments and Securities Act, any prospectus issued by or on behalf of a company must indicate:
Website design By BotEap.com– The number of founders or managerial or deferred shares (if any).
Website design By BotEap.com– Directors ‘qualification actions (if any) and directors’ remuneration in accordance with the provisions of the bylaws.
Website design By BotEap.com– Names, addresses and descriptions of the directors or proposed directors;
Website design By BotEap.com– The minimum subscription, which is the amount that, in the opinion of the directors, must be collected through the issue in order to provide amounts for the following matters.
Website design By BotEap.coma) The price of any property purchased to be paid with the proceeds of the issue;
Website design By BotEap.comb) The preliminary expenses and the subscription commission in charge of the company.
Website design By BotEap.comc) Refund of any money loaned by the company in view of a and b above
Website design By BotEap.comd) The amount to be provided with respect to the matters indicated in (iv) that do not come from the product of the emissions and the sources of said amounts.
Website design By BotEap.com– The moment of the opening of the subscription lists.
Website design By BotEap.com– The amount payable upon request and award of each share.
Website design By BotEap.com– Details of shares and obligations issued other than in cash
Website design By BotEap.com– Details of options on shares or obligations
Website design By BotEap.com– Data of the sellers of properties sold to the company.
Website design By BotEap.com– Amount paid for the property, indicating the amount paid for goodwill.
Website design By BotEap.com– Date, parts and general nature of each material contract.
Website design By BotEap.com– Names and addresses of the company’s auditors.
Website design By BotEap.com– Participation of the administrators in the property that the company proposes to acquire.
Website design By BotEap.com– Drafts, commission and brokerage.
Website design By BotEap.comRemuneration of promoters.
Website design By BotEap.comEXPERT STATEMENT IN A BROCHURE
Website design By BotEap.comWhen a prospectus includes a statement made by an expert prior to issuance, two conditions must be met:
Website design By BotEap.com1. You must have given your consent and you must not, prior to the delivery of a copy of the prospectus for registration, have withdrawn your consent in writing to the issuance with your statement included;
Website design By BotEap.com2. The prospectus must include a statement that you have given your consent.
Website design By BotEap.comRESPONSIBILITY REGARDING THE BROCHURE.
Website design By BotEap.comSince potential investors in the company know little or nothing about the company, the content of a prospectus should include material facts that allow the investing public to make a correct assessment of the true purpose and position of the company. Accordingly, the brochure must not contain false or misleading statements or information. The company and those responsible for the issuance of a prospectus that contains errors in the action of the subscriber can be civil or criminal.
Website design By BotEap.comCIVIL REMEDIES.
Website design By BotEap.comThis is both under common law and in CAMA 2004; and they are:
Website design By BotEap.com1. Action by the aggrieved subscriber in damages for fraud under section 562, can sue for compensation.
Website design By BotEap.com2. Recession action of the award contract (article 571).
Website design By BotEap.comTo be successful in a common law damage and / or recession claim, such underwriters must prove:
Website design By BotEap.coma) That the inaccuracies constitute a statement of material facts;
Website design By BotEap.comb) That he was induced by the misrepresentation to subscribe for the shares;
Website design By BotEap.comc) That the misrepresentation was fraudulent and that it was carried out by a person acting on behalf of the company;
Website design By BotEap.comd) That he suffered loss or damage as a result. According to CAMA, to be successful, the aggrieved underwriter must prove that the prospect contained a misstatement on which it relied and therefore suffered losses.
Website design By BotEap.comCRIMINAL PROCEDURES
Website design By BotEap.comUnder section 563, any company official who authorizes the issuance of a prospectus, or a statement in lieu of a prospectus, containing false statements, shall be guilty of a crime and liable upon conviction following a charge of imprisonment for a period not to exceed 2 years or a fine not to exceed N5,000 or both; or summary sentence to a term of 3 months or a fine of N500 or both.