What is called private placement? - Vidyadip

Question

What is called private placement?

✓

Answer

By publication of prospectus the public company invites the public at large to purchase its securities.
But instead of inviting public for purchasing prospectus such company may make private placement for the Guarantee Subscription.
As per the Companies Act ‘Private placement means company makes an offer to allot securities to definite group of person to purchase securities.’
Maximum 50 persons or such number of persons as fixed by the SEBI can be invited for the Minimum Subscription over and above institutional purchasers and employees qualified under the Employees Stock Option Scheme.

Need a full question paper?

Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.

Start Generating Free

Explore more

More "3 Marks Each" from Prospectus→Prospectus — all question types→SPCC STD 11 Commerce question papers→Gujarat Board STD 11 Commerce question papers→Gujarat Board question paper generator→

Similar questions

Write down the procedure to open DEMATS A/C.

Which additional information are required to be shown by the Companies having continuing business ?

“Secretary must have legal awareness.” — Explain.

Give the specimen of “Fully Blocked Style” of Business letter writing.

Which company is given exemption from using words “Limited” or “Private limited” ?

In terms of accountability, how many and where can the company be divided?

Explain Concepts: (1) Authorized Share Capital

Explain the meaning and definition of a company.

Explain the regular and occassional parts of a business letter.

‘Prospectus is a document presenting fiduciary relationship (relationship of trust) with the public at large.’ — Explain.