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Corporate Law

B Krishnan
21/02/2017 0 0

Conditions for issue of securities under Private Placement:

Section 42 of the Companies Act 2013, provides the procedures for issue of shares  through issue of Private placement offer letter.

  1. The offer shall be made to a person or group of person not exceeding 50 in number.
  2. Only those persons to whom this offer is made shall apply for securities.
  3. The private placement should have been approved by the present shareholders by way of Special resolution.
  4. The aggregate number of persons to whom this private placements can happen cannot exceed 200 numbers in a year in case of more than one private placement happens in a company.
  5. The minimum value of securities that shall be invested cannot be less than Rs. 20 thousands.
  6. The amounts shall be received only through bank of account of the subscribers.
  7. The company shall file with ROC the full details of such private placement as well as keep  all relevant records in its office.
  8. The company should allot shares as against the offer within 60 days from the date of receipt of application money.
  9. The company should not make any type of advertisement in any media about the private placement.
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