private placement and preferential allotment

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vaishali singh (Querist)
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08 February 2017 sir what differentiates funding through private placement u/s 42 and preferential allotment u/s 62 (1)(c).

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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08 February 2017 Preferential Allotment means an issue of shares or other securities, by a Company to any select group of persons on a preferential basis.

Private Placement means any offer of securities or invitation to subscribe securities to a select group of persons by a Company (other than by way of public offer) through issue of a private placement offer letter

vaishali singh

vaishali singh (Querist)
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08 February 2017 thank you sir,please elaborate it further.

Jatin Bajaj

Jatin Bajaj (Expert)
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09 February 2017 Preferrential Allotment is basically done in case of Public Listed Company to the persons who are not the sahreholders of the Company. Shares are issued to the outsider by way of public issue. But in case of Private placement shares are issued to the promoters or existing shareholders other than by the way of public issue. Closely held companies and private companies follow the propcedure of private placement. listed or widely held companies follows the complete procedure of prefrential allotment.

vaishali singh

vaishali singh (Querist)
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09 February 2017 sincere thanks for your time and consideration.

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