(1)

For the purposes of sub-section (2) and sub-section (3) of section 42, a company shall not make an offer or invitation to subscribe to securities through private placement unless the proposal has been previously approved by the shareholders of the company, by a special resolution for each of the offers or invitations:

Provided that in the explanatory statement annexed to the notice for shareholders' approval, the following disclosure shall be made:-

(a) particulars of the offer including date of passing of Board resolution;

(b) kinds of securities offered and the price at which security is being offered;

(c) basis or justification for the price (including premium, if any) at which the offer or invitation is being made;

(d) name and address of valuer who performed valuation;

(e) amount which the company intends to raise by way of such securities;

(f) material terms of raising such securities, proposed time schedule, purposes or objects of offer, contribution being made by the promoters or directors either as part of the offer or separately in furtherance of objects; principle terms of assets charged as securities:

(2)

For the purpose of sub-section (2) of section 42, an offer or invitation to subscribe securities under private placement shall not be made to persons more than two hundred in the aggregate in a financial year:

Provided that any offer or invitation made to qualified institutional buyers, or to employees of the company under a scheme of employees stock option as per provisions of clause (b) of sub-section (1) of section 62 shall not be considered while calculating the limit of two hundred persons.

Explanation. - For the purposes of this sub-rule, it is hereby clarified that the restrictions aforesaid would be reckoned individually for each kind of security that is equity share, preference share or debenture.

(3)

A private placement offer cum application letter shall be in the form of an application in Form PAS-4 serially numbered and addressed specifically to the person to whom the offer is made and shall be sent to him, either in writing or in electronic mode, within thirty days of recording the name of such person pursuant to sub-section (3) of section 42:

Provided that no person other than the person so addressed in the private placement offer cum application letter shall be allowed to apply through such application form and any application not conforming to this condition shall be treated as invalid.

(4)

The company shall maintain a complete record of private placement offers in Form PAS-5.

(5)

The payment to be made for subscription to securities shall be made from the bank account of the person subscribing to such securities and the company shall keep the record of the bank account from where such payment for subscription has been received:

Provided that monies payable on subscription to securities to be held by joint holders shall be paid from the bank account of the person whose name appears first in the application:

Provided further that the provisions of this sub-rule shall not apply in case of issue of shares for consideration other than cash.

(6)

A return of allotment of securities under section 42 shall be filed with the Registrar within fifteen days of allotment in Form PAS-3 and with the fee as provided in the Companies (Registration Offices and Fees) Rules, 2014 along with a complete list of all the allottees containing-

(i) the full name, address, Permanent Account Number and E-mail ID of such security holder;

(ii) the class of security held;

(iii) the date of allotment of security ;

(iv) the number of securities held, nominal value and amount paid on such securities; and particulars of consideration received if the securities were issued for consideration other than cash.

(7)

The provisions of sub-rule (2) shall not be applicable to -

(a) non-banking financial companies which are registered with the Reserve Bank of India under the Reserve Bank of India Act, 1934 (2 of 1934); and

(b) housing finance companies which are registered with the National Housing Bank under the National Housing Bank Act, 1987 (53 of 1987),

(8)

A company shall issue private placement offer cum application letter only after the relevant special resolution or Board resolution has been filed in the Registry:

Provided that private companies shall file with the Registry copy of the Board resolution or special resolution with respect to approval under clause (c) of sub-section (3) of section 179.] [Inserted by Notification No. G.S.R. 43(E), dated 22.1.2019 (w.e.f. 31.3.2014).]

Annexure

Form PAS-1

[Pursuant to section 27(1) and rule7(2) of Companies (Prospectus and Allotment of Securities) Rules, 2014 ]

Advertisement giving details of notice of special resolution for varying the terms of any contract referred to in the prospectus or altering the objects for which the prospectus was issued

Corporate Identification Number (CIN) -Name of the company-Registered office address-

Public Notice

Notice is hereby given that by a resolution dated.........., the Board has proposed to vary the terms of the contract referred to in the prospectus dated....... (or to alter the object(s) for which the prospectus dated...... was issued) issued in connection with issue of [number and description of securities] at an issue price of Rs. ............/- per [description of security] aggregating to Rs. ........................................................................................./.

In pursuance of the said resolution, further notice is given that for approving the said proposition, a special resolution is to be passed by postal ballot.

The details regarding such variation/alteration are as follows-

(1)

Particulars of the terms of the contract to be varied ( or objects to be altered)-

(2)

Particulars of the proposed variation/alteration-

(3)

Reasons/justification for the variation-

(4)

Effect of the proposed variation/alteration on the financial position of the company-

(5)

Major Risk factors pertaining to the new Objects

(6)

Names of Directors who voted against the proposed variation/alteration

Any interested person may obtain the copy of the special resolution along with the explanatory statement free of charge at the registered office of the company or at the office of its Company Secretary Shri .......... at .............. or visit the website of the Company viz. ————— for a copy of the same.

SignatureDatePlace

FORM PAS.2

Information Memorandum

[Pursuant to section 31(2) of the Companies Act,2013 and rule 10 of Companies (Prospectus andAllotment of Securities) Rules, 2014]

Form Language

English

Hindi

Refer the instruction kit for filing the form.

1.

Particulars of the company

(a) *Corporate Identification Number (CIN)

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| (b) Global Location number

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| (c) Name of the company

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| (d) Address of Registered office of the company

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| (e) email id of the company

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2.

*Details of Shelf Prospectus

(a)

Reference details

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| (b)

| Date of filing with Registrar

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| (c)

| Date of issue

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| (d)

| Period of validity of shelf prospectus

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