Commencement of Companies Amendment Act, 2017 with respect to Private Placement
Peer Mehboob
MCA vide its notification dated 07/08/2018 has notified Section 10 of Companies Amendment Act, 2017 w.e.f 07.08.2018. Section 10 of CAA, 2017 substitutes Section 42 of the Companies Act, 2013 which provides provisions for Private Placement.
MCA has also notified Companies(Prospectus and allotment of securities) Second Amendment Rules, 2018 wherein Rule 14 has been substituted.
Major changes under Section 42 read with Rules after this amendment are:
1. Return of Allotment (Form PAS 3) shall be filed with Registrar within 15 days from the date of allotment (earstwhile 30 days)
2. Substituted Form PAS 4 (Private Placement Offer Cum Application Letter).
3. Money received under Private Placement shall not be utilized unless return of allotment is filed with ROC.
4. A company may make more than one issue of securities under private placement, subject to the maximum prescribed limit of 200 persons in a financial year
5. Particulars to be disclosed in the Explanatory Statement annexed to the notice for Shareholders’ approval, are also prescribed in rules.
6. A separate penalty for non filing of Return of Allotment within prescribed time, is imposed on company, its promoters and directors for an amount of Rs. 1000 per day but not exceeding Rs.25 Lacs.
http://mca.gov.in/Ministry/pdf/CAAct2017_05012018.pdf