law: Companies Act, 1956
  Sec 56    -     Matters
  
  to be stated and reports to be set out in prospectus.
  (1) Every prospectus issued :
  (a) by or on behalf of a company, or
  (b) by or on behalf of any person who is or
  
  has been engaged or interested in the formation of a company, shall state the
  
  matters specified in Part I of Schedule II and set out the reports specified in
  
  Part II of that Schedule; and the said Parts I and II shall have effect subject
  
  to the provisions contained in Part III of that Schedule.
  (2) A condition requiring or binding an
  
  applicant for shares in or debentures of a company to waive compliance with any
  
  of the requirements 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.
  (3) No one shall issue any form of application
  
  for shares in or debentures of a company, unless the form is accompanied by a
  
  memorandum containing such salient features of a prospectus as may be
  
  prescribed which complies with the requirements of this section :
  Provided  that a copy of the prospectus shall, on
  
  a request being made by any person before the closing of the subscription list,
  
  be furnished to him :
  Provided  further that this sub-section shall not
  
  apply if it is shown that the form of application was issued either:
  (a) in connection with a bona fide invitation
  
  to a person to enter into an underwriting agreement with respect to the shares
  
  or debentures ; or
  (b) in relation to shares or debentures which
  
  were not offered to the public.
  If any person acts in contravention of the
  
  provisions of this sub-section, he shall be punishable with fine which may
  
  extend to fifty thousand rupees.
  (4) A director or other person responsible for
  
  the prospectus shall not incur any liability by reason of any non-compliance
  
  with, or contravention of, any of the requirements of this section, if :
  (a) as regards any matter not disclosed, he
  
  proves that he had no knowledge 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 :
  Provided  that no director or other person shall
  
  incur any liability in respect of the failure to include in a prospectus a
  
  statement with respect to the matters specified in clause 18 of Schedule II,
  
  unless it is proved that he had knowledge of the matters not disclosed.
  (5) This section shall not apply :
  (a) 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 will or will not have the right to renounce in favor of other
  
  persons ; or
  (b) to the issue of a prospectus or form of
  
  application relating to shares or debentures which are, or are to be, in all
  
  respects uniform with shares or debentures previously issued and for the time
  
  being dealt in or quoted on a recognized stock exchange ;
  but subject as aforesaid, 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.
  (6) Nothing in this section shall limit or
  
  diminish any liability which any person may incur under the general law or
  
  under this Act apart from this section.