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Business Environment and Law-Prospectus And Statement In Lieu Of Prospectus

Remedies Against The Company: - Prospectus And Statement In Lieu Of Prospectus

   Posted On :  08.05.2018 08:31 am

Remedies Against The Company: - Prospectus And Statement In Lieu Of Prospectus

Remedies Against The Company:
 
 
Any person who, takes shares from the company may,
 
 
  •              Rescind the contract to take the shares
 
  •              Claim damages.
 
He must, however, take action to rescind the contract:
 
 
  •              within a reasonable time,
 
  •              before proceedings to wind up the company have commenced, and
 
  •              before he does anything which is inconsistent with the right to repudiate, e.g., to accept dividends.
 

Remedies Against Directors Or Promoters:

 
 
A shareholder who had been induced to take shares may claim :
 
  •              Damages for fraudulent misrepresentation
 
  •              Compensation under Section 62;
 
  •              Damages for non-compliance with the requirements of Section 56 regarding contents of the prospectus.

 
 The liability of a promoter or a director or any other person who has authorized the issue of misleading prospectus is two-fold ,viz.,
 
  •              Civil liability and
 
  •              Criminal liability

 

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