Preferential allotment procedure according to Companies Act, 2013
supriya singh
deepak manglani
1. Identify the person(s) to whom the private placement offer/invitation has to be made - All offers covered under this section shall be made only to such persons whose names are recorded by the company prior to the invitation to subscribe, and that such persons shall receive the offer by name.
2. Prepare the private placement offer letter - A private placement offer letter needs to be prepared as per PAS 4. It shall be accompanied by an application form addressed specifically to the person to whom the offer is made. and shall be sent to him.
3. Seek member’s approval- The proposed offer of securities or invitation to subscribe securities needs to be approved by the shareholders of the Company, by way of a Special Resolution, for each of the Offers/ Invitations.
4. Circulate the offer letter - The offer letter and the application form addresses specifically to the proposed allottee shall be sent to him, either in writing or in electronic mode, within 30 days of recording the names of such persons as specified above. No person other than the person so addressed in the application form shall be allowed to apply through such application form and any application not so received shall be treated as invalid.
5. Maintain record of private placement offers - The Company shall maintain a complete record of private placement offers and acceptances of such offers in PAS 5.
6. File information with ROC - A copy of the record maintained by the company along with the private placement offer letter in Form No. GNL 2 shall be filed with the Registrar with fee and with the Securities and Exchange Board, where the company is listed, within a period of 30 days of circulation of the private placement offer letter.
7. Receive acceptances and payment - All monies payable towards subscription of securities under this section shall be paid through cheque or demand draft or other banking channels but not by cash. Further, the payment to be made on subscription of securities shall be made from the bank account of the person subscribing to such securities. In case of joint holders, it shall be paid from the bank account of the person whose name appears first in the application.
8. Open separate bank account for keeping subscription money - Monies received on application under this section shall be kept in a separate bank account in a scheduled bank and shall not be utilized for any purpose other than—
(a) for adjustment against allotment of securities; or
(b) for the repayment of monies where the company is unable to allot securities.
9. Make allotment of securities - A company making an offer or invitation under this section shall allot its securities within 60 days from the date of receipt of the application money for such securities and if the company is not able to allot the securities within that period, it shall repay the application money to the subscribers within15 days from the date of completion of 60 days and if the company fails to repay the application money within the aforesaid period, it shall be liable to repay that money with interest at the rate of 12% p.a. from the expiry of the sixtieth day.
10. File return of allotment with Registrar - A return of allotment of securities under section 42 shall be file with the Registrar in Form No. PAS 3 with necessary fees along with a complete list of all security holders containing-
(i) full name, address, PAN, and E-mail id of such security holders;
(ii) class of security held;
(iii) date of becoming security holder;
(iv) number of securities held; nominal value and amount paid up on such securities; and particulars of consideration received.
11. Issue share certificates and update minutes book and registers.
Note: Procedure of increase in authorized capital should be followed if authorized capital is not as per the required amount of increase in capital through private placement
Kind Regards
Deepak Manglani
9654705725
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