SECTION 42 PRIVATE PLACEMENT AND SECTION 62 FURTHER ISSUE OF SHARE CAPITAL

[Shilpa Verma]

Dear Members,

I have confusion in section 42 private placement and Section 62(1)(iii) Preferential offer of share.

kindly explain me. 

Regards

CS Shilpa Verma

[K.Muthusamy]

Find the attachement with details

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[Shilpa Verma]

Dear Member,

Thank u Sir.

I have an Query relating to private placement, preferential allotment and right issue.

 

1. In Case of Right Issue, Is it Section 42 (Private Placement) condition comply by the company?

2. If company has issue share to some of the existing shareholders, it comes under Right Issue or preferential issue or private placement. which option company has to take for issue of equity shares to existing shareholders. 

3. In private placement, what does it means, Select group of persons whose names are recorded by the company.

Regards

CS Shilpa Verma

[CS Alpesh Dhandhlya]

Dear Member

As per my views the, ''select group of persons'' means it is ''private placement''

Whereas if we are allotting to the existing share holders only then right issue mode is applicable.

[SUDHIER KUMAR GUPTHA]

offer letter is not required in preferential offer?

[Shilpa Verma]

Dear Sudhir

As per My view

In case of Preferential offer, offer letter is Not required

But disclosures under rule 13(2) of the companies (share capital and debentures) rules, 2014  to be made in the  explanatory statement to special resolution. 

Regards

CS Shilpa Verma

[Manikandan J]

Issue on preferential basis(sec 62)  insist on additional compliance to comply the  conditions laid down in section 42 .

One of the Conditions is to Issue Offer letter -PAS-4 and file it with ROC & SEBI within 30 days.

Request other members to share their views for better clarity

regards

Mani

[Shilpa Verma]

Dear Mani,

As per my view,

 

In case of Private Placement  PAS - rule 14 apply and pas rule specify that a company may make an offer or invitation subscribe through issue of private placement offer letter in form pas 4

 

In case of preferential offer, companies (share capital and debenture) rules, 2014 apply and SH Rules 13, the Company shall make the following disclosure in the explanatory statement to be annexed to the notice of the general meeting.

 

I'm right?

 

Regards

CS Shilpa Verma

[Devansh Garg]

private placement offer rules will be applicable only in case of issuance of shares to new shareholders. for existing shareholders, simply board resolution and u can file pas-3 directly.

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[Manikandan J]

It says only that Conditions under Section 42 needs to be fulfilled for issue of shares under Section 62.

One of the condition is issuing offer letter in PAS-4 to allottee .

Is it mentioned in the rule & act about the conditions excluded for preferential issue?

regards

Mani

[SUDHIER KUMAR GUPTHA]

Every Preferential offer is a Private Placement and every Private Placement need not be a Preferential Offer.

On Thu, Jul 17, 2014 at 12:25 PM, Shilpa Verma <v.shi...@gmail.com> wrote:

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[SUDHIER KUMAR GUPTHA]

Dear Shilpa,

Kindly go through rules framed under Sec.62, it has been clearly stated that invariably Sec.42 needs to be complied while making preferential  allotment.

[Shilpa Verma]

Dear Sudhir Kumar

Thank u for your reply..

Sir it means in case of preferential allotment, Offer Letter in PAS 3 and PAS 4 filed with ROC. and when company has issue preferential offer, company has  to comply Section 42, PAS Rules, Section 62 and companies (share capital and debenture) rules, 2014 Comply.

Kindly clear my one doubt.

Section 42(6) Company making an offer or invitation shall allot its securities within 60 days form the date of receipt of the application money and Rule 13(2)(f) ofcompanies (share capital and debenture) rules, 2014 states that allotment of securities is completed within 12 months from the date of passing of the special resolution.

manner of issue of securities under private placement is not provided under section 42 and pas rules.?

Regards

CS Shilpa Verma

 

[Manikandan J]

If it is a listed company, SEBI (ICDR) rule will also needs to be complied, in that case allotment needs to done in 15 days from the date of Shareholders approval.

regards

Mani

[Sudhir Sutar]

hello everyone,

can you share the draft documents for right issue for private limited company. I mean resolutions and other related documents.

Regards

Sudhir

[SUDHIER KUMAR GUPTHA]

Dear Shilpa,

the allotment of securities on a preferential basis made pursuant to the special resolution passed pursuant

to sub-rule (2)(b) shall be completed within a period of twelve months from the date of passing of the

special resolution.

The underlined part speaks about the validity period of special resolution both for receiving funds from shareholders as well as allotment of shares by the Board.

Sec.42 speaks about allotment of securities with in 60 days from the receipt of share application money.

On Thu, Jul 17, 2014 at 4:32 PM, Shilpa Verma <v.shi...@gmail.com> wrote:

[SUDHIER KUMAR GUPTHA]

precisely it means after passing of resolution the prospective investor can avail 10 months time to credit the funds and within 2 months from the credit of funds, the company is supposed to allot shares.

[PSK]

Dear Members, 

One of my client has to allot shares to new shareholders who made expenses from their account to put pipeline in the name of Company before incorporation of the Company. 

Kindly  advice. Urgent. 

Thanks & Regards

P. Senthil kumar

+91 98436 66752

[csyogan .]

money cannot be utilized unless it is allotted; so precisely it would be 2 months or before withdrawal of money which ever is earlier..

regards,
yogan.