Preferencial allotment by private limited under ca 2013

This query is : Resolved

Guest

Guest (Querist)

24 July 2014 Good Morning Experts...
Can you please tell me procedure for preferential allotment of equity shares by private company under Companies Act 2013? Is there is any difference between private placement and preferential allotment?

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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24 July 2014 A reading of sections 42 and 62 of CA 2013 read along with the corresponding rules issued thereunder suggests that a
‘private placement’ and ‘preferential allotment’ under sections 42 and 62, res pectively are one and the same and they m ust both comply with the same provisions and procedures .

PROCEDURE FOR PRIVATE PLACEMENT

1.Check Provision in AOA regarding Private Placement

2.Call Board Meeting:

• To Prepare Offer Letter

• Make Proposal for Private Placement

• Prepare list of persons to whom option will be given

1.Call EGM:
• Pass Special Resolution- will be valid for 12 month

• If private placement is not completed within 12 Month pass another Special Resolution

• Approve Draft Offer Letter by Special Resolution

1.File MGT-14 with ROC
Attachments: -
Notice of EGM
Certified True Copy of Special Resolution
Minutes

2.Issue offer letter in PAS-4 within 30 days of record of name of persons:

• Application form serially numbered

• Address to the persons to whom the offer is made

1.Prepare complete record of Private Placement in PAS-5
2.File PAS-4 + PAS-5 with ROC within 30 days of issue of offer letter in GNL-2

3.Make Allotment of shares within 60 days of receipt of Money from the persons to whom right was given.

4.Called Board Meeting for allotment of shares

5.File PAS-3 with Roc within 30 days of Allotment. Attachments: – List of Allottees – Board Resolution for allotment of share

6.File Form MGT-14 along with Resolution pass in Board meeting for allotment of shares.

12. Issue Share Certificates.

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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Guest

Guest (Querist)

24 July 2014 Thank you Sir...But is limit of Minimum issue of Rs.20,000 each which is applicable to private placement, is also applicable to preferential allotment cause there in no any restriction mention regarding this in section 62 ?

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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24 July 2014 it is applicable to Preferential allotment also

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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24 July 2014 it is applicable to Preferential allotment also

Guest

Guest (Querist)

24 July 2014 ok sir..thank you.