Section 34 of the Companies Act, 2013
Section 34 of the Companies Act, 2013 deals with the criminal liability for misstatements in a prospectus.
📘 Section 34 – Criminal Liability for Misstatements in Prospectus
Provision:
Where a prospectus includes any untrue or misleading statement, or omits any material fact, and such misstatement or omission is made with the intention to deceive, then:
Every person who authorised the issue of the prospectus shall be liable under Section 447 (which relates to fraud).
Punishment under Section 447:
Imprisonment: Not less than 6 months, which may extend to 10 years.
Fine: Amount not less than the amount involved in the fraud, which may extend up to 3 times that amount.
✅ Key Points:
Applies to false or misleading statements in a prospectus.
Focuses on intention to deceive (fraudulent intent).
Liable persons: Those who authorized the issue of such a prospectus.
Punishment as per Section 447 (strict anti-fraud provision).
RELATED Blog
0 comments