Is private placement or preferential issue same ?
This query is : Resolved
12 March 2017
Respected Experts,
Kindly let me know that preferential issue & private placement both are same ? And what is the limit of number of persons to whom securities can be issued during the year in private placement & preferential issue ?
Thanking You
Kindly let me know that preferential issue & private placement both are same ? And what is the limit of number of persons to whom securities can be issued during the year in private placement & preferential issue ?
Thanking You
Ravi Kiran Vustela
(Expert)
12 March 2017
They both are not same exactly but preferential issue is linked with private placement (Rule 13 of chapter IV says follow rule 14 of part II of chapter III)
In private placement maximum number of persons can be 200(excluding offer under 62(1)(b) & QIB).....
in preferential allotment there is no limit... 62(1)(c)
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Ravi Kiran Vustela
(Expert)
12 March 2017
if equity shares or any other securities which are converted into or exchanged with equity shares of a company at a latter date... then you have to comply with 62(1)(c) + section 42.....
on the other hand securities are not converted (non convertible debentures) then you need to comply with only section 42......
kindly refer the definition of securities under both sections.. you get better idea...
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CA Gopal Somani
(Expert)
13 March 2017
You can also check the below link for more detailed information
https://taxguru.in/company-law/difference-between-private-placement-and-preferential-allotment-under-companies-act-2013.html
https://taxguru.in/company-law/difference-between-private-placement-and-preferential-allotment-under-companies-act-2013.html
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