A private limited company wishes to allot around 100 shares each of face value Rs. 10 at Rs. 4,000 to five individual investors. I have heard that there is some change in the process of allotment of shares. Would request you to provide the complete process of allotment of shares in such a scenario.
On the basis of above facts, it appears to me that this qualifies as private placement of shares and accordingly the provisions as applicable to private placement shall apply to the issue. However as per Sec 42 read with rules, a private placement offer should be for minimum face value Rs 20000 to each allottee. However, in the present case, the face value of allotment is much below 20,000, so would it still qualify as private placement. If not, what are the provisions that will apply to share allotment of shares.
Would require your response specifically with respect to the following:
1. Issue of Prospectus
2. Valuation Report to be obtained from registered valuer
3. Who is registered valuer as per new companies act.
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