Re South of England Natural Gas and PetroleumCo. Ltd  1 Ch. 573.A newly formed company issued 3000 copies of a document which offered forsubscription shares in a company and which was headed “for private circulationonly”. These copies were then circulated to the shareholders of a number of gascompanies and the question arose Was this a prospectus?
The court held that the distribution of a document entitled, “For Private Circulationonly” offering the company shares was an offer to the public and the document wasa prospectus. The term offering used in the definition is used in a non-technicalsense as prospectus invites offers. The term public is not restricted to the public atlarge. It includes a section thereof.In the words of Viscount Summer in ‘Nash Vs Lyde (1929) AC 128Stated;“The public in the definition is of course a general word, noparticular number are prescribed. Anything from two toinfinity may serve perhaps even one if he is intended to be thefirst of a series of subscribers but made further proceedingsneedless by himself subscribing the whole. The point is thatthe offer is such as to be opened to anyone who brings hismoney and applies in due from, whether the prospectus wasaddressed to him on behalf of the company or not”In the words of Windeyer J. in Lee Vs Evans 112 Commonwealth Law Reports 276
“The essence of an invitation to the public is not in the manner of itscommunication or in the number of the persons to whom it iscommunicated. The criteria are rather -are the recipients of theinvitation persons chosen at members of the general public, thepublic at large, or in sundry or are they a select group to whomand to whom alone the invitation is addressed so that if anoutsider sought to respond to it, he will be told that he was notone of those invited to come in? ”The contents of a prospectus are prescribed by the provisions of the Companies Act40. Under section 43 of the Companies Act, a copy of the prospectus must bedelivered to the registrar for registration on or before the date of publication.Question has arisen as to when a prospectus is deemed to have been issued. In thewords of Viscount Summer in,Nash Vs Lyde“ I do not think that the term is satisfied by a single private communicationbetween friends even f they are business friends or even though preparations havebeen made for other documents to be used in other communication if none suchtakes place. In the present case, all that constituted the issue was that one of thedirectors in the cause of a general endeavour to file money was furnished withsome copies of this type written documents and gave one of them to a friend whoalso requested passed it on to a friend of his own. I cannot belief that anyone inbusiness will call this the issue of a prospectus.”CONTENTS OF A PROSPECTUS.
Section 40 of the Companies Act. Every prospectus issued by or on behalf of acompany or by or on behalf of any person who is or have been engaged or