A prospectus issued by a company for subscription of its share and debentures is: (a) An invitation - (a) An invitation to make an offer to buy Description: An invitation to an offer is only a circulation of an offer, it is an attempt to induce offers and precedes a definite offer. Example- Company issuing a prospectus for subscription of share and debentures. Acceptance of an invitation to an offer does not result to contract and only an offer emerges in the process of negotiation. - Nature of contracts Interview Questions and Answers

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Question: A prospectus issued by a company for subscription of its share and debentures is:
(a) An invitation to make an offer to buy
(b) An express offer to sell the share/ debentures
(c) Implied offer to sell the share/ debenture
(d) None of the above

Answer: (a) An invitation to make an offer to buy
Description: An invitation to an offer is only a circulation of an offer, it is an attempt to induce offers and precedes a definite offer. Example- Company issuing a prospectus for subscription of share and debentures. Acceptance of an invitation to an offer does not result to contract and only an offer emerges in the process of negotiation.

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Question: A prospectus issued by a company for subscription of its share and debentures is:
(a) An invitation to make an offer to buy
(b) An express offer to sell the share/ debentures
(c) Implied offer to sell the share/ debenture
(d) None of the above

Answer:

(a) An invitation to make an offer to buy
Description: An invitation to an offer is only a circulation of an offer, it is an attempt to induce offers and precedes a definite offer. Example- Company issuing a prospectus for subscription of share and debentures. Acceptance of an invitation to an offer does not result to contract and only an offer emerges in the process of negotiation. Source: CoolInterview.com

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