Skip to content

CA Foundation · Business Laws · The Companies Act, 2013

Rohan Pharma Ltd issued a public offer of shares. Its prospectus mentioned that a reputed chartered engineer, Mr. Iyer, had certified the value of its plant. Mr. Iyer had not consented in writing to the inclusion of his statement. What is the legal position?

A prospectus containing an expert's statement cannot be issued unless the expert has given written consent and has not withdrawn it before the copy is delivered to the Registrar. Accuracy of the statement, later consent or directors' responsibility cannot replace this prior consent requirement.

  1. AThe prospectus cannot be issued with an expert's statement unless the expert has given written consent and not withdrawn it before delivery to the RegistrarCorrect
  2. BThe prospectus is valid because an expert's statement can be included without consent if it is accurate
  3. CThe prospectus is valid if the consent is obtained within 30 days after issue
  4. DThe prospectus is valid if the company directors take personal responsibility for the statement

Explanation

A prospectus including a statement made by an expert must not be issued unless the expert has given written consent to its issue and has not withdrawn it before delivery of the copy to the Registrar. Accuracy of the statement or directors' responsibility does not substitute for consent. Consent after issue is too late.

Did you get it right without looking?

One question tells you little. A timed set on The Companies Act, 2013 shows your real accuracy, how long you take and where you lose marks.

Practise The Companies Act, 2013Free diagnostic mock

More The Companies Act, 2013 questions