THE CORPORATIONS LAW

CHAPTER 6D - FUNDRAISING

PART 6D.3 - PROHIBITIONS, LIABILITIES AND REMEDIES

Division 1 - Prohibitions and liabilities

SECTION 731   DUE DILIGENCE DEFENCE FOR PROSPECTUSES  

731(1)  Reasonable inquiries and reasonable belief - statements.  

A person does not commit an offence against subsection 728(3), and is not liable under section 729 for a contravention of subsection 728(1), because of a misleading or deceptive statement in a prospectus if the person proves that they:

(a)  made all inquiries (if any) that were reasonable in the circumstances; and

(b)  after doing so, believed on reasonable grounds that the statement was not misleading or deceptive.

731(2)  Reasonable inquiries and reasonable belief - omissions.  

A person does not commit an offence against subsection 728(3), and is not liable under section 729 for a contravention of subsection 728(1), because of an omission from a prospectus in relation to a particular matter if the person proves that they:

(a)  made all inquiries (if any) that were reasonable in the circumstances; and

(b)  after doing so, believed on reasonable grounds that there was no omission from the prospectus in relation to that matter.