Companies Act 2014 section 1170

Criminal liability for untrue statements in division documents

Section 1170 establishes criminal liability for directors, experts and other persons responsible for issuing division documents that contain untrue statements.

• Directors and persons who authorised the issue of division documents containing untrue statements commit a category 2 offence — the relevant documents are the common draft terms of division, the directors' explanatory report and the division financial statement
• If an expert's report on the division contains an untrue statement, both the expert and anyone who authorised its issue commit a category 2 offence
• The directors held liable are those who held office at the date the common draft terms were drawn up or, for the explanatory report or financial statement, at the time that document was prepared
• A defence is available where the accused can show they exercised all reasonable care and skill and had reasonable grounds for believing the statement was true up to the time the document was issued