Mr Ram applies for share on the basis of a prospectus which contain misstatement The shares are allo...........

Companies Act-Phase (I & II) Prospectus

Mr. Ram applies for share on the basis of a prospectus which contain misstatement. The shares are allotted to him, who afterwards transfer them to Mr. Shyam. Can Mr. Shyam bring an action for a rescission on the ground of misstatement?

Yes

Partly Yes

Partly No

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Explanation:

As per Section 37 of the Companies act, 2013, Mr. Shyam cannot bring an action for rescission of the contract to buy shares from Mr. Ram on the ground of misstatement. A suit may be filed or any other action may be taken under Section 34 or Section 35 or Section 36 only by any person, group of persons or any association of persons affected by any misleading statement or the inclusion or omission of any matter in the prospectus.