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Statement In Lieu Of Prospectus (Section 70): - Prospectus And Statement In Lieu Of Prospectus

   Posted On :  08.05.2018 08:26 am

If a public company makes a private arrangement for raising its capital then it must file a statement in lieu of prospectus with the registrar at least three days before any allotment of shares or debentures can be made.

Statement In Lieu Of Prospectus (Section 70):
 
 
If a public company makes a private arrangement for raising its capital then it must file a statement in lieu of prospectus with the registrar at least three days before any allotment of shares or debentures can be made.
 
If allotment of shares or debentures is made without filing the Statement in lieu of prospectus, the allottee may avoid it within two months after the statutory meeting, or where no such meeting is to be held, within two months of the allotment. Contravention also renders the company and every director liable to a fine up to Rs. 10,000.
 

Misleading Prospectus (Sections 62-63):

 
The prospective shareholders are entitled to all true disclosures in the prospectus. The persons issuing the prospectus are bound to state everything accurately and not to omit material facts,
1. Which contains untrue statements in it.
2. Which does not contain particulars which ought to have been there i.e.
Suppression of facts which if they had been there i.e suppression of facts which if they would not have induced the purchaser to invest money.

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