0Conditions for issue of securities under Private Placement:
Section 42 of the Companies Act 2013, provides the procedures for issue of shares through issue of Private placement offer letter.
- The offer shall be made to a person or group of person not exceeding 50 in number.
- Only those persons to whom this offer is made shall apply for securities.
- The private placement should have been approved by the present shareholders by way of Special resolution.
- The aggregate number of persons to whom this private placements can happen cannot exceed 200 numbers in a year in case of more than one private placement happens in a company.
- The minimum value of securities that shall be invested cannot be less than Rs. 20 thousands.
- The amounts shall be received only through bank of account of the subscribers.
- The company shall file with ROC the full details of such private placement as well as keep all relevant records in its office.
- The company should allot shares as against the offer within 60 days from the date of receipt of application money.
- The company should not make any type of advertisement in any media about the private placement.
