40.
| (1) Every prospectus issued by or on behalf of a company, or by or on behalf of any person who is or has been engaged or interested, in the formation of the company, shall state the matters specified in Part I of the Schedule hereto and set out the reports specified in Part II of that Schedule. The provisions contained in Parts I and II, shall have effect subject to the provisions contained in Part III, of that Schedule. |
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| (2) A condition requiring or binding an applicant for shares in, or debentures of, a company, to waive compliance with any requirement of this section, or purporting to affect him with notice of any contract, document, or matter not specifically referred to in the prospectus, shall be void. |
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| (3) It shall not be lawful to issue any form of application for shares in, or debentures of, a company, unless the form is issued with a prospectus which complies with the requirements of this section : |
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| (4) In the event of non-compliance with or contravention of any of the requirements of this section, a director or other person responsible for the issue of the prospectus shall not incur any liability by reason of such non-compliance or contravention, if
| | (a) as regards any matter not disclosed, he proves that he was not cognizant thereof; or | | |
| | (b) he proves that the non-compliance or contravention arose from an honest mistake of fact on his part; or | | |
| | (c) the non-compliance or contravention was in respect of matters which in the opinion* of the court dealing with the case were immaterial or was otherwise such as ought, in the opinion of that court, having regard to all the circumstances of the case, reasonably to be excused: | | |
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| (5) The provisions of this section shall not apply to the issue to existing members or debenture holders of a company of a prospectus or form of application relating to shares in or debentures of the company, whether an applicant for shares or debentures shall or shall not have the right to renounce in favour of other persons, but save as aforesaid, the provisions of this section shall apply to a prospectus or a form of application whether issued on or with reference to the formation of a company or subsequently. |
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| (6) Nothing in this section shall limit or diminish any liability which any person may incur under any written or other law or this Act other than this section. |
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| (7) In any case where a prospectus has been sent for registration in accordance with the provisions of section 43 and has been registered by the Registrar, nothing in the preceding provisions of this section shall be deemed or construed to prohibit the issue or publication of any notice, circular or advertisement stating that the prospectus has been registered and issued and that copies thereof are available on application, if such notice, circular or advertisement does not contain any invitation to the public to subscribe for or purchase any shares in or debentures of a company. |
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Sri Lanka Consolidated Acts