Question

.................. of the Companies Act, 2013 requires disclosure in the prospectus of names and addresses of CFO about sources of promoters' contribution among other things.

• A. Section 36
• B. Section 37
• C. Section 26
• D. Section 38

Hint:

For company law, prospectus-related provisions are very important. Remember Section 26 (Contents), Section 34 (Criminal Liability for Misstatements), and Section 35 (Civil Liability for Misstatements).

Answer 1

The Correct Option is C

The cleanest way to answer this is to sort the four sections by subject matter before picking one.

1. Group the offence provisions: Sections 36, 37 and 38 all deal with wrongdoing around a prospectus or securities, fraudulent inducement, remedies for fraud, and personation respectively, rather than with what the prospectus itself must contain.
2. Identify the content provision: Section 26 is the section that actually lists what must be stated in a prospectus, including CFO details and the sources of promoters' contribution, which is exactly the disclosure obligation being asked about.
3. Match to the question: Since the question is about mandatory disclosure content, not about penalties or remedies, Section 26 is the only fit among the four.

The correct answer is Section 26.

Answer 2

Another way to approach this is to notice the logical sequence of prospectus regulation, moving from what must be disclosed to what happens if things go wrong.

1. Section 36: This provision comes into play only after a fraudulent inducement has already occurred, punishing the wrongdoer, and therefore logically follows, rather than defines, the disclosure requirement the question is asking about.
2. Section 37: This too is a downstream provision, giving affected investors a right of action once a prospectus has already misled them, again a consequence of inadequate disclosure rather than the disclosure requirement itself.
3. Section 26: Logically, before any question of fraud or remedy can arise, the law must first specify what the prospectus is required to contain in the first place, and that foundational requirement, including CFO details and sources of promoters' contribution, is exactly what Section 26 lays down.
4. Section 38: Like Sections 36 and 37, this is a penal provision addressing wrongful conduct (personation) in acquiring securities, not a provision about what information the prospectus must carry.

Reading the disclosure obligation as the foundation that the other three sections build on again points to Section 26.

Hence, the correct answer is Section 26.