Prospectus — SPCC STD 11 Commerce — Question

Criminal liability : To give deliberate misrepresentation in the prospectus and cause financial loss is considered as criminal offence. In this type of liability the officers of the company can be punished with imprisonment or fine or both. The very purpose of making misleading statement is to fraudulently tempt to invest or attempt to tempt the person to invest in a company. For such incidents strict provisions for punishment are made under law.
(A) Liability of other offences regarding information of the prospectus:
(1) If the prospectus is not of the legal character or the necessary information are not provided there in, the Director or authorized person can be held responsible.
(2) Prospectus can be published only after getting it registered before the Registrar. There should be date and signature of authorized persons in the prospectus. If the above formalities are not complied with the person responsible for the publication of prospectus may be punished with fine.
(3) If the provisions regarding the statements of experts are not complied with the person who has published the prospectus is liable for fine.