Companies Act 2014 section 507

Criminal liability for untrue statements in division documents

Section 507 establishes criminal liability for individuals responsible for untrue statements included in key documents prepared as part of a company division.

• Directors and persons who authorised the issue of division documents containing untrue statements are guilty of a category 2 offence
• The documents covered include the common draft terms of division, the directors' explanatory report, and any division financial statement
• An expert who prepares a report containing an untrue statement, and anyone who authorised its issue, is also guilty of a category 2 offence
• A defence is available if the person can prove they exercised all reasonable care and skill and genuinely believed the statement was true up to the time the document was issued