Prospectus — SPCC STD 11 Commerce — Question

• Responsibility for misrepresentation in the advertisement is as follows:

• An advertisement is an important document inviting the public to invest in shares or debentures of a company, in which case misrepresentation, fraudulent advertisements or exaggerated statements are made by the authorized officials of the company.
• Misrepresentation means:-

1. The statement made in respect of the details of the advertisement is misleading.
2. The required details are not given in the advertisement with the intention of misleading the reader.
3. Tried to mislead the public by using ambiguous words in the advertisement.

• Thus, as mentioned above, if misleading, exaggerated representations are made in the advertisement, the liability of the company arises.