Justify the following statement:Company and officers responsible for issuing Prospectus are liable for mis-statements in Prospectus.

Justify the following statement:Company and officers responsible for i

1.	Justify the following statement:Company and officers responsible for issuing Prospectus are liable for mis-statements in Prospectus.
Answer» The prospectus is a written document giving an invitation to the public to purchase shares or debenture of the company. It provides all the necessary information about a company, its business, the management, financial structure, etc., of a company. A prospectus must be prepared very carefully and accurately. It should contain true and correct information and honest disclosure of facts. A company and all those officials can be held responsible for any mis-statement in the prospectus. These people have to face severe consequences. The shareholder can cancel the contract. Persons authorizing the issue of prospectus containing mis-statement are punishable with imprisonment of two years and a fine up to ₹ 5,000. Thus, I agree with the above statement.