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Private placement by a Private Company

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Private placement by a Private Company

Postby acmramesh » Wed May 29, 2013 9:59 am

Dear all,

Management of private company wants to issue offer document for issue of shares to new selected shareholders under private placement basis.

As per Companies Act, the Board empowers to allot shares on receipt of share application money. But, whether Board empower to issue offer document without getting approval from existing shareholders. If Board issued offer document to new selected shareholders, will that be valid under Companies Act.?

1) Do the company need to obtain share valuation certificate from chartered accountant , because it is going to be issued to new shareholders. Please clarify.
2) If Board issued shares to new shareholders without consent from existing shareholders, will there be any objection from existing shareholders?

Kind Regards,
Ramesh
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Re: Private placement by a Private Company

Postby sudarss1 » Thu May 30, 2013 10:34 am

private placement comes only when there is public issue. in private cos there is no private placement. Ref sections 81 and 81(1A)
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Re: Private placement by a Private Company

Postby acmramesh » Thu May 30, 2013 3:59 pm

sudarss1 wrote:
> private placement comes only when there is public issue. in private cos
> there is no private placement. Ref sections 81 and 81(1A)

...........................................
thanks. But if private company issues offer document to a new selected group investors with the help of approval of existing members, will there be any consequences / complications or will that be treated as violation of company law.

Please help me with your views.

Ramesh
acmramesh
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Posts: 5
Joined: Wed Jul 18, 2007 7:33 pm


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