CS Divesh Goyal
Quick Summary
Introduction Private placement is a strategic method of raising capital, allowing companies to issue securities to a select group of investors without resorting to public issuance. Governed primarily by Section 42 of the Companies Act, 2013, and the accompanying Companies (Prospectus and Allotment
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FAQ :
A private placement of shares is a strategic method for companies to raise capital by issuing securities to a select group of investors, rather than through a public offering.
Private placements are primarily governed by Section 42 of the Companies Act, 2013, and the Companies (Prospectus and Allotment of Securities) Rules, 2014.
Key forms include MGT-14, which must be filed with the Special Resolution, and PAS-3, filed after the Board Resolution for allotment of shares.
The offer for private placement must remain open for at least 30 days.
Share certificates must be issued within two months of the allotment of shares.
A valuation report is obtained to help decide the offer price for the shares being privately placed.
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