Can you write a better company prospectus?

Q.1

Use the active not the passive voice so sentences are shorter and it’s clear who the action-taker is. Which is better? *

Fees are paid on an annual basis.
We pay fees on an annual basis.

Q.2

Avoid hidden verbs. These are verbs turned into nouns, often ending in –sion, –ing, –tion, –ment or –isation. Use strong verbs instead to make sentences more direct and simpler to read. Which is better? *

We will offer securities to the public.
An offering of securities will be made to the public.

Q.3

Use personal pronouns. They allow you to speak directly to investors and can shorten your sentences. Which is better? *

Before deciding to invest in the securities, investors should seek professional advice from the relevant advisers about their particular circumstances.
You should seek professional advice from relevant advisers about your particular circumstances before deciding to invest in our securities.

Q.4

Use plain, everyday words. Which is better? *

Using terms like "despatch", "thereafter", "due to the fact that" and "in the event that".
Or their equivalents: "send", "then" "because" and "if".

Q.5

Avoid legal, financial or technical business jargon. If you must use jargon, explain their meaning clearly when you first use them and put them in a glossary for easy reference. Which is better? *

Any new shares allotted and issued by our Company pursuant to the Performance Share Plan shall in all respects rank pari passu with other existing shares then in issue.
Any new shares which we allot and issue under the Performance Share Plan shall carry equal rights to payment as other existing shares which have been issued.

Q.6

More on jargon. Which is better? *

The company has entered into a revolving credit facility of S$10 million with XYZ bank that is secured by a first priority lien on all assets under the company.
We have obtained a credit line from XYZ bank that allows us to borrow up to S$10 million. Our liabilities for the extended credit line are backed by all of our assets and XYZ bank will have priority over other creditors to our assets.

Q.7

Use short, straightforward sentences and avoid unnecessary words. Which is better? *

The Sponsor has agreed to waive its entitlement to the Sponsor Distribution, which is S$5 million of distributions for the Forecast Year.
The Sponsor has provided the Managers with an undertaking that it shall waive its entitlement to the Sponsor Distribution, being S$5 million of distributions for the Forecast Year.

Q.8

Tabulate complex information using systematic lists or other arrangements. Which is better? *

The issuance of the Employee Option Plan Shares and/or the Performance Rights Plan Shares pursuant to the vesting of awards which may be granted and/or the exercise of options which have been granted under the Performance Rights Plan and Employee Option Plans respectively, the Call Option Shares, as well as the issuance of the Shares pursuant to the conversion of the Convertible Notes would have a further dilutive effect on new investors in the Offering.
Your shareholding in the Company may be diluted if any of following events occurs: (a) the issuance of Employee Option Plan Shares or Performance Rights Plan Shares, or both, due to – (i) the vesting of awards which may be granted; (ii) the exercise of options granted under the Performance Rights Plan or Employee Option Plans, as the case may be; or (iii) the exercise of the Call Option Shares; or (b) the issuance of Shares due to the conversion of the Convertible Notes.

Q.9

Write in the positive and avoid the use of multiple negatives. Which is better? *

We will reject applications from any persons under the age of 21 years.
We will not accept applications from any person who has not attained the age of 21 years.

Q.10

Avoid defining commonly understood terms. Which is better? *

The Directors of the Company made the Announcement on 1 January 2014 that the Sale and Purchase Agreement had been entered into between the Company and the Vendor, to purchase the Property for the amount of S$10 million (the “Consideration Amount”). Under the terms of the Sale and Purchase Agreement, the Consideration Amount will be satisfied with the issuance of 10 million new ordinary shares in the share capital of the Company (the “Consideration Shares”) at a price of S$1.00 per Consideration Share.
On 1 January 2014, the Company entered into an agreement with the Vendor to purchase ABC property for S$10 million. Under the terms of the agreement, the payment for ABC property will be satisfied with the issuance of 10 million new ordinary shares of the Company at a price of S$1.00 per share.