Prospectus
A formal document providing detailed information about an investment offering, typically used in securities offerings or mutual fund sales. The prospectus presents comprehensive information about risks, opportunities, and terms to potential investors.
For instance, a company issuing $100 million in new shares prepares a prospectus detailing business operations, financial history, risk factors, and use of proceeds. This document helps investors make informed decisions while meeting regulatory requirements for full disclosure.
Preparing a prospectus requires careful attention to disclosure requirements and accuracy. Organizations must provide complete information while managing legal liability.