Private placement

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Revati Sathe (Querist)
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09 February 2018 1. A private Company accepted Rs. 50,00,000/- from person A, who is neither shareholder nor Director, now wants to issue shares upto Rs.12,50,000/- under private placement , is it possible ?

2. A private company can issue shares to only one person under Private Placement.

CS Vishal Mehta

CS Vishal Mehta (Expert)
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12 February 2018 1: As Private Limited Company has accepted Rs. 50 lacs from A who is neither shareholder nor director and further presuming that he is also not a promoter, so in such a case Company has to follow deposit rules u/s. 73 of the Companies Act, 2013 and the provisions of the Companeis (Acceptance of Deposit) Rules, 2014.

2: Private Placement Procedure can be initiated separately by following the provisions of section 42 of the Companies Act, 2013 and by opening separate bank account in a way as mentioned in that section and relevant rules, in any case, private placement procedure can not be combined with such advanced deposit of Rs. 50 lacs.

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