TOPIC 44: QUICK REFERENCE TO “Private Placement”

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Quick Reference to " "Private Placement" :-
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Points:-
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1. Section 42 of Companies Act, 2013 & Rule 14 of Companies ( Prospectus & Allotment of Securities ) Rules, 2014. Deals with Private Placement.
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2. Simply, Private Placement means Issue of Securities to a small number of Selected Investors.
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3. It's not a Public Offer.
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4. Offer & Issue can be made to 50 person at a time but not more than 200 Persons in aggregate/total during a Financial Year. ( QIB's & Employees are not covered ).
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5. Consideration cannot be made through Cash.
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6. Special Resolution is required but AOA authorization is not required.
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7. Private placement offer letter should be in a Form PAS-4 and Record of Private Placement should be in a PAS-5.
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8. PAS-3 i.e. Return of Allotment is required to file with ROC.
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9. The Value of Offer per person shall be minimum of 20,000 of Face value of Securities.
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10. The Offer for Private Placement is Separately Considered for Each type of Securities.
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11. The Company has to Allot Securities within 60 days from the date of receipt of Application Money..
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12. Valuation Report is not required for Private Placement.
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Regards
ACA SOURAV BAGARIA