SACHINVERMA (CS) (79 Points)
05 July 2014Can 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?
Vandana J Doshi
(Practising Company Secretary)
(12562 Points)
Replied 08 July 2014
RoHaN k
(CA & CS)
(308 Points)
Replied 08 July 2014
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.
CAclubindia
