Scope of liability for misstatement in Prospectus:

What is a Mis-statement of the prospectus?
A statement included in a prospectus shall be deemed to be untrue if the statement is misleading in the form or context or if there is any omission from the prospectus in any manner to mislead. A liability arises when any person subscribes for any shares or debentures based on content provided in the prospectus. If any person suffers loss or damages due to untrue information in the prospectus.

How Board of Directors is held liable for offenses?
There is a collective involvement of the Board in taking any business actions for the company. Sometimes there is collective Board liability or individual directors held liable as per the involvement in the malafide act.

The liabilities can arise for various reasons as given here:

Liability of the company for fraud
Liability to the third parties
Liability for breach of warranty
Liability for breach of statutory duties
Liability for acts of another director
Criminal Liability
click here:https://www.registerkaro.in/post/section-34-of-companies-act-2013-2
For more information, visit us on: https://www.registerkaro.in/