GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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0.5 %
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1.5 %
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2.5 %
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3.5 %
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Detailed explanation-1: -1. Securities under Private Placement can only be issued to a group of maximum 200 people in aggregate in a financial year, excluding QIP & ESOP. It is to be noted that the limit of 200 people is per security. (i.e., 200 for equity shares, 200 for preference shares, 200 for debentures, etc.)
Detailed explanation-2: -Private placements can be done by either private companies wishing to acquire a few select investors or by publicly traded companies as a secondary stock offering.
Detailed explanation-3: -Private placement is a process through which a company can offer its shares or bonds privately to accredited investors. Companies that require capital but are not eligible to list their stocks publicly often rely on private placements.
Detailed explanation-4: -Rule 14 (8) of theCompanies (Prospectus and Allotment of Securities) Rules 2014 spells out that a company shall issue a private placement offer cum application letter only after the relevant special resolution or the board resolution has been filed with the Registrar of Companies.