Commonwealth Consolidated Acts

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CORPORATIONS ACT 2001 - SECT 731

Due diligence defence for prospectuses

Reasonable inquiries and reasonable belief--statements

             (1)  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.

Reasonable inquiries and reasonable belief--omissions

             (2)  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.



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