Private placement vis-a-vis preferential allotment

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 April 2015 Dear Experts

We are issuing shares to a person who is providing advisory services to the company. Since company has no funds, they are issuing shares instead of remuneration. The same shall be covered under preferential allotment u/s 61(1)(c) of Co. Act 2013 for issue of shares for consideration other than cash.
Ref to that sec says we have to follow section 42 provisions which relates to pvt.placement
One of the conditions of pvt placement being the amount should come in cheque and that it should be deposited in a separate bank account. But there is no money coming. Only in lieu of services, co. is giving shares.
How to comply with the prov of section 42?

CA Kanj Goel

CA Kanj Goel (Expert)
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09 April 2015 It's a case covered under issue of shares other than cash hence money will not comeand you need to attach agreement stating the fact with ps3. In case you need further information about this you may contact me at 9015980399 or kanj3101@gmail.com

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