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Companies Act 2013 - Private Placement and Share Application

Sec 42 of the Companies Act 2013 talks about PRIVATE PLACEMENT and SHARE APPLICATION AND ALLOTMENT.

 The section will have huge impact on a number of private companies who have been exploiting the share applications and transfers.
  • Private Placement offer for maximum 200 persons in a financial year;
  • Special resolution to be passed at a Members General Meeting for each offer;
  • Issue Price justification required in Explanatory Statement to the Notice of Meeting;
  • Minimum share application from each person to be Rs.20,000/- face value of shares;
  • Fresh offer not allowed until allotment of previous offer completed;
  • Share application Money cannot be received in cash;
  • Separate bank account should be operated for receipt of share application money;
  • Share Application money cannot be utilized for any purpose other than allotment;
  • Allotment to be made within 60 days of receipt of share application money, or else to be refunded within 15 days of expiry of 60 days;
  • In case of delay in refund, interest @ 12% p.a. required to be paid and such nonrefunded application money shall be deemed to be deposit;
  • Offer records to be maintained in Form PAS-5;
  • Form PAS-4 containing offer details to be filed within 30 days of offer letter;
  • Form PAS-3 for allotment to be filed within 30 days of allotment.
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Comments

  1. anjalee javeriJune 3, 2014 at 3:47 PM

    thanks.. but then Board meeting is not required?
    what I understood is - hold a Board meeting to fix AGM and finalise notice then hold GM and then issue offer letters, but then when we need to record the names of the offerees, as the offer letter has to be sent within 30 days of recording

    ReplyDelete
  2. UnknownJune 16, 2014 at 4:02 PM

    if not deposited in separate bank account then what is the solution for dis

    ReplyDelete

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