A prospectus is a document issued by the company inviting the public and investors for the subscription of its securities. A Prospectus is required to be issued only after the incorporation of the company. These documents describe stocks, bonds and other types of securities offered by the company.

A)public company because According to Companies Act,1956 a public company can issue prospectus in order to get capital from the public.A prospectus is a document issued by the company in order to subscribe capital from the public.

About Prospectus

A prospectus is a legal document that provides information about a company to potential investors. It is issued by a public company, as mentioned in option 'A'. Let's understand why it is issued by a public company and not by other entities.

Public Company

- A public company is a company that has issued shares to the public and is listed on a stock exchange. It has a large number of shareholders and is required to comply with certain legal and regulatory requirements.
- When a public company wants to raise capital through the sale of its shares or debentures, it must issue a prospectus. This is because public investors need to have all the relevant information about the company before making an investment decision.
- The prospectus provides detailed information about the company's financials, operations, management, risk factors, and any other material information that may impact an investor's decision.
- It helps in promoting transparency and accountability, as the company is legally bound to disclose all relevant information to potential investors.

Private Company

- On the other hand, a private company is privately owned and does not issue shares to the public. It has a limited number of shareholders and is not required to comply with the same level of regulatory requirements as a public company.
- Since a private company does not offer its shares to the public, it does not need to issue a prospectus. The company can raise capital through private placements or by approaching a select group of investors who are willing to invest in the company without the need for a prospectus.

Statutory Corporation and Departmental Undertaking

- Statutory corporations and departmental undertakings are different types of entities that are often created by the government for specific purposes, such as providing essential services or managing public infrastructure.
- These entities do not issue shares to the public and are not involved in raising capital from investors. Therefore, they do not need to issue a prospectus.

Conclusion

In summary, a prospectus is issued by a public company because it is required to provide all relevant information to potential investors in order to promote transparency and accountability. Private companies, statutory corporations, and departmental undertakings do not issue prospectuses as they have different ownership structures and are not involved in raising capital from the public.