PRIVATE PLACEMENT
Checklist
Section (1)(c) read with Sec-42 of Companies Act 2013
- Check Provision in Article regarding Private Placement
- Call Board Meeting:
- To Prepare Offer Letter that is PAS-4
- Make Proposal for Private Placement
- Prepare list of persons to whom option will be given
- Call EGM
- Call EGM:
- Pass SR– will be valid for 12 month
- If not completed PP in 12 Month pass another SR
- Approve Draft Offer Letter (PAS-4)by SR
- File MGT-14 with ROC Attachments: – Notice of EGM – CTC of SR – Minutes
- Issue offer letter in PAS-4 within 30 days of record of name of persons:
- Application form serially numbered
- Address to the persons to whom the offer is made
- Prepare complete record of Private Placement in PAS-5
- File PAS-4 + PAS-5 with ROC within 30 days of issue of offer letter in GNL-2
- Make Allotment of shares within 60 days of receipt of Money from the persons to whom right was given.
- Called BM for allotment of shares
- File PAS-3 with Roc within 30 days if Allotment. Attachments: – List of Allottees – BR for allotment of share
- File Form MGT-14 along with Resolution pass in Board meeting for allotment of shares.
- Issue Share Certificates.
NOTE: An offer can be made under a Private Placement Offer Letter to not more than 200 people. Not just the limitation of allotment to 200 people but even an invitation to subscribe cannot be made to more than 200 people. The 200 people limit excludes Qualified Institutional Buyers and Employees and the limit of 200 people is calculated individually for each kind of security. Obviously, there cannot be a public announcement of such offers.
- The application form has to be numbered and addressed specifically to the person to whom the offer is made along with the Offer Letter. Allotments can be made only to such persons
- The value of the Offer per person shall not be less than INR 20,000 of ‘face value’ of securities. The payment for subscription should be through the bank account of the person subscribing to the securities and the company should keep a record of the bank account from where such payments have been received. No cash transaction is permitted. The money so received shall be kept in a separate bank account of the company and utilised only for allotment (or repayment).
- The price of the security has to be justified and the inference is that, it requires a valuation report by a Registered Valuer (can be a company secretary, chartered accountant or a cost accountant)
- Non-compliance can lead to a penalty of INR 2 crores or the amount involved in the offer, whichever is higher.
DRAFT RESOLUTION -EGM-
“RESOLVED THAT in accordance with the provisions of Section 42 and all other applicable provisions, if any, of the Companies Act, 2013 (including any statutory modification or re-enactment thereof for the time being in force), the regulations/ guidelines, if any, issued by the Government of India, the Reserve Bank of India and any other applicable laws, rules and regulations (including any amendment thereto or re-enactment thereof for the time being in force) and the relevant provisions of the Memorandum and Articles of Association of the Company and subject to such approvals, consent , permission and sanction as may be required from the government of India, Reserve Bank of India and any other relevant statutory, governmental authority or department s , institutions or bodies (“concerned authority”) in this regard and further subject to such terms and conditions or modifications thereto as may be prescribed or imposed by any of the concerned authorities while granting such approval and permission as may be necessary or which may be agreed to by the Board of directors of the company (hereinafter referred to as the Board or any other committee constituted by the Board or any person(s) authorized by the Board to exercise the power conferred on the Board by the resolution) and subject to such terms, conditions and modifications as the Board may in the discretion impose or hereby authorized to create offer, issue and allot from time to time in one or more tranches upto 1,88,000 Equity shares at a price of Rs 100/- per equity share to the following Persons/Body Corporates on the private replacement basis ,in such manner as the Board may in its absolute discretion deem fit:
| Sl. No | Name | No of Shares to be allotted @ Rs 100/- |
| 1 | XYZ Pvt Ltd | 174,000 |
| 2 | MR X SHARMA | 14,000 |
| Total | 188,000 |
RESOLVED FURTHER THAT
- The relevant date for the purpose of pricing of issue of the shares be fixed as 24th November, 2015 being the 30 days prior to extraordinary general meeting of the shareholders to consider the proposed private replacement issue.
- The equity shares allotted in terms of the resolution shall rank pari-passu in all respects with the existing equity shares of the company.
- Draft letter of offer in form PAS-4 as placed before the meeting be and is hereby approved and be issued by Mr. XXX Kumar, Director of the company.
- The Board be and is hereby authorized to decide and approve the other terms and condition of the issue of equity shares, and shall also be entitled to vary, modify or alter any of the terms and conditions including the issue price on the higher side, as it deems expedient, without being required to seek any further consent or approval of the company in general meeting.
RESOLVED FURTHER THAT for the purpose of giving effect to any issue or allotment of shares of the company, the Board be and is hereby authorized on behalf of the company to take all such actions and do all such deed, matters and things as it may, in its absolute discretion, deem necessary, desirable or expedient and to settle any questions, difficulties or doubts that may arise in this regard including but not limited to the offering, issue and allotment of equity shares of the company as it may in its absolute discretion deem fit and proper.
RESOLVED FURTHER THAT the Board be and is hereby authorized to delegate all or any of the powers herein conferred by this resolution to any director or directors or to any committee of directors or to any officer or officers of the company to give effect to this resolution.”
Certified True Copy
For MMM Private Limited
Director
DIN