Amended and updated notes on section 34 of Companies Act 2013. Detail discussion on provisions and rules related to criminal liability for misstatements in prospectus.
Chapter III (Sections 23–42) of the Companies Act, 2013 (CA 2013) deals with the provisions related to prospectus and allotment of securities. Section 34 of CA 2013 provides for criminal liability for misstatements in prospectus.
Recently, we have discussed in detail section 33 (Issue of application forms for securities) of CA 2013. Today, we learn the provisions of section 34 of Companies Act 2013 read with the Companies (Prospectus and Allotment of Securities) Rules, 2014.
Section 34 of the Companies Act, 2013 has been notified by the Ministry of Corporate Affairs (MCA) vide Notification No. S.O. 2754(E) issued dated 12.09.2013. This notification was come into force from 12th September, 2013 i.e. the commencement date of section 34 is 12-9-2013.
| Name of Act | The Companies Act 2013 |
|---|---|
| Enacted by | Parliament of India |
| Administered by | Ministry of Corporate Affairs (MCA) |
| Number of Chapters | 29 |
| Number of Sections | 484 (470-43+57) |
| Number of Schedules | 7 |
| You are reading: | |
| Chapter No. | III |
| Chapter Name | Prospectus and Allotment of Securities |
| Section No. | 34 |
| Section Name | Criminal liability for misstatements in prospectus |
| Monthly Updated Edition | Company Law PDF |
Section 34 of Companies Act 2013: Criminal liability for misstatements in prospectus
Section 34 shall come into force on 12th September, 2013 vide Notification No. S.O. 2754(E) dated 12.09.2013.
Where a prospectus, issued, circulated or distributed under this Chapter, includes any statement which is untrue or misleading in form or context in which it is included or 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:
Provided that nothing in this section shall apply to a person if he proves that such statement or omission was immaterial or that he had reasonable grounds to believe, and did up to the time of issue of the prospectus believe, that the statement was true or the inclusion or omission was necessary.