Simple Definition of prospectus
: a printed statement that describes something (such as a new business or investment) and that is sent to people who may want to be involved in it or invest in it
: a book or document that provides information about a school, business, etc.
Full Definition of prospectusplural
1 : a preliminary printed statement that describes an enterprise (as a business or publication) and that is distributed to prospective buyers, investors, or participants
2 : something (as a statement or situation) that forecasts the course or nature of something
Did You Know?
Like prospect, prospectus looks forward. Thus, a prospectus originally outlined something that didn't yet exist, describing what it would become. This might even be a book; the great dictionary of Noah Webster, like that of Samuel Johnson, was first announced in the form of a prospectus, so that well-to-do people might actually subscribe to it—that is, pay for it in advance so that Webster would have money to live on while writing it. Soon, prospectus was being used to mean a description of a private school or college, intended to attract new students. Today the word very often means a description of a stock offering or mutual fund, whether new or not.
Origin and Etymology of prospectus
First Known Use: 1765
Legal Definition of prospectus
: a preliminary printed statement describing a business or other enterprise and distributed to prospective buyers, investors, or participants; specifically : a description of a new security issue supplied to prospective purchasers and providing a disclosure of detailed information concerning the company's business and financial standing
Additional Notes on prospectus
Under the Securities Act of 1933, the prospectus is part of the registration statement that must be filed with the Securities and Exchange Commission before a security may be offered or sold to the public. The Securities Act defines prospectus broadly as “any prospectus, notice, circular, advertisement, letter, or communication, written or by radio or television, which offers any security for sale or confirms the sale of any security.”
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