Can any one tell me the difference between Private Placement and Preferential Allotment ?
If a company wants to allot shares to its existing members then it is come under the ambit of Private Placement or Preferential Allotment?
If a company wants to allot shares to its non existing members then it is come under the ambit of Private Placement or Preferential Allotment?
please quote section also?
There is not much difference,
Sec 42 : is an aletrnative mechanism to approach public for funding instead complying Provisions of prospectus and SEBI compliance
Sec 62 : is to issue shares to outsider , whenever it could not get further funding from existing shareholders
But once the company prefered route stated under 62(1) then condition stated under sec. 42 has to comply with.
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