14 February 2017
Rule 13 Companies (Share Capital and Debentures) Rules, 2014 Meaning of Preferential Allotment: It means an issue of shares or other securities, by a Company to any select group of persons on a preferential basis.Following Points to be considered while making before making Preferential Offer: i) Authorised by its AOA ii) Special Resolution is passed. iii) Securities allotted should be fully paid up. iv)Need to make certain disclosure in Explanatory Statement. v) Allotment should be completed within 12 months. vi) Valuation Report from Registered Valuer
Sec42: Private Placement It means any offer of securities or invitation to subscribe securities to a select group of persons by a Company (other than by way of public offer) through issue of a private placement offer letter
However, the Company has to comply the following mentioned 7 points even in case of Preferential Allotment Following Points to be considered while making Private Placement: 1. Share Application money should be kept in separate bank account. 2. The names of subscribers to issue should be recorded before making invitation to subscribe. 3. Allotment should not be made exceeding 200 persons in a FY (excluding QIB or Employee under ESOPs) 4. Allotment must be made for not less than Rs 20000/‐ of face value of the securities for each allotee. 5. Mode of Payment: Share application money should be paid through Cheque or DD or other Banking Channels. 6. Time period of Allotment: Allotment of securities should be made within 60 days from receiving the application money. If not able to allot, then repay SAM within 15 days. 7. Default: If default is made in repayment, then pay with interest rate of 12% p.a.
14 February 2017
thank you so much Mitesh Mehta for the detailed reply.
for preferential allotment do we need to prepare letter of offer, PAS-4,PAS-5?????
actually i want to allot 10 lakh shares as preferetial allotment for private company i have to first of all 1.Authorisation of AOA 2.Board resolution for of issue of preferential shares 3.Special resolution have to file MGT-14 then 4.Valuation report 5.Board Resolution for allotment and have to file PAS-3
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