PRIVATE PLACEMENT & PREFERENTIAL ALLOTMENT

PRIVATE PLACEMENT & PREFERENTIAL ALLOTMENT

Relevant Section: 42 and 62

Relevant Rules: Rule 14 of Chapter III and Rule 13 of Chapter IV

To Check:

1. The Company is having sufficient Authorised share Capital. If not, first increase authorised share capital. (Procedure for increase in Authorised Share Capital: http://click2compliance.blogspot.com/2016/05/increase-in-authorised-capital.html )        

2.  Issue must be authorized by the AOA.

3.    No. of Person to whom offer (Equity, preference, debenture) can be made:

In one year, not exceeding 200 (excluding QIB and Employees under ESOP).

If more than 200 then deemed to be an offer to public and govern by Public Offer.

4.    No fresh issue unless earlier issue is allotted / withdrawn / abandoned by Company.

5.   Value of offer or invitation per person shall not be less than Rs. 20,000/- of face value of securities.

6.    To pass separate Special Resolution for each of the offer and invitation.

7.    To obtain Valuation report of Registered valuer to determine the price. In case of issue of shares for consideration other than cash, Registered valuer shall submit valuation report alongwith justification.

Process:

1.    To hold Board Meeting

            (a)  Identify the person to whom offer is made.

            (b)  Recording Name of person who shall receive offer by Name.

            (c)   Pass resolution for issue of shares.

            (d)  Call General Meeting to pass Special Resolution. 

                  Explanatory Statement shall have details as prescribed in Rule 13 of Chapter IV.

2.   To file e-Form-MGT-14 with RoC within 30 days from date of Board Meeting in which resolution for issue of Shares is passed - Private Company exempted.

3.    To hold GM and pass Special Resolution.

4.   To file Special Resolution with Explanatory Statement with RoC in e-Form MGT-14 with in 30 days from the date of EGM.

5.    To Issue Private Placement Offer Letter in PAS-4 in writing or in electronic mode within 30 days of recording of name of persons (Sr No.1). Private Placement Offer Letter shall be accompanied by an Application form serially numbered and addressed specifically to the person to whom the offer is made and shall be to such person whose name are recorded by company prior to the invitation to subscribe.

6.    To maintain a Complete record of Private Placement Offer Letters in Form PAS-5.

7.    To file e-Form GNL – 2 with RoC enclosing Form PAS-5 alongwith Form PAS-4 within 30 days of circulation of relevant private placement offer letters.

 

8.    Subscription money shall be paid in cheque / DD/other banking channels but not by cash. In case of Joint shareholders, subscription money shall be received from bank accounts of the 1^st Holder.

9.  Application money shall be kept in separate bank account and shall utilized only for (a) Allotment or (b) Refund. Cannot use application money before allotment.

10.    Company shall keep record of Bank Account from where subscription received.

11. To allot securities within:

         (a)  12 months from date of passing Special Resolution, otherwise another special resolution require to be pass to complete allotment.

       

        (b)  60 days from date of receipt of application money. If not allotted, repaid within 15 days from date of completion of 60 days. Otherwise pay 12% p.a, interest from the date of expiry 60^th day.

12. Securities allotted shall be made fully paid up at the time of their allotment.

13. To file return of allotment within 30 days of Allotment in e--Form PAS-3.

14. Pass Board resolution for issue of Share Certificate and authorized two directors (if composition of the Board permits, one of the two directors shall be director other than MD or WTD) and Company Secretary /Authorised Signatory.

15. To pay stamp duty on Share Certificate and issue Share Certificate within two months from the date of Allotment. 

16. To make entry in Register of Members and index of Members.

17. Not to release any public advertisements or any media, marketing or agent to inform the public at large about such an offer.