NOTES ON EFFECTIVE PROVISIONS OF COMPANIES ACT 2013

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CRIMINAL LIABILITY FOR MIS-STATEMENT IN PROSPECTUS [SECTION 34]

Where a prospectus, issued, circulated or distributed:

a)    includes any statement which is untrue or misleading in form or context in which it is included; or

b)   where any inclusion or omission of any matter is likely to mislead;

Every person who authorises the issue of such prospectus shall be liable under section 447 i.e. fraud.

Defences available in this section are:

a)    Person prove that statement or omission was immaterial;

b)   Person has reasonable ground to believe and did believe that statement was true; or

Person has reasonable ground to believe and did believe that the inclusion or omission was necessary.

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