Private placement and preferential allotement

Save Share

This query is : Resolved

Rakesh Jain (Querist)

03 February 2016 Hi experts !
What is difference between Private Placement and Preferential Allotement ???
Is it there any provision regarding issue of securities like A Private Company may issue securities by right issue or private placement and a public co. may issue securities by all method including preferential allotement ?
If x pvt ltd. have 2 shareholders but want to issue securities only one shareholders and don’t want to take consent another shareholders… then which issue should be consider ??
Can any one help me about it..

CS Divesh Goyal

CS Divesh Goyal (Expert)

08 February 2016 Mr. Rakesh,

There are three process of ISsue of shares in Private Company:

1. Right Issue: in this you have to give option to both shareholders
2. Private Placement/Prefrential Allotment: by this you can issue shares to one shareholder but you have to get pass Special Resolution in General Meeting so you need consent of the Shareholders.

Above provisions are into the act to stop this type of issues only which you are asking.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now