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Private Placement Offer Letter

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Aishwarya Shah

Form PAS-4
Private Placement
Private Placement Offer Letter
Last updated on May 5th, 2021


A Private Placement Offer Letter is the document that a Company issues while making a Private Placement Offer to a specified group of persons. Furthermore, when a Company raises capital through Private Placement, it needs to issue this document in Form PAS-4 and circulate it among the identified persons.

Section 42 of Companies Act 2013 and Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules 2014 applies while making Private Placement of securities.

Filing of Private Placement Offer Letter

Contents of Private Placement Offer Letter

  1. Information related to the Company
    • Name, addresses, and contact details of the company
    • Name, address, and other details of Directors of the Company
    • Business activity of Company
    • Details of default by Company, in case of any.
  2. Particulars of the Offer
    • Date of Board Resolution
    • Date of Resolution of General meeting approving the offer
    • Kind and Class of Securities offered
    • Price of Securities
    • Details of Valuer who values the securities
    • Amount of Capital that Company intends to raise through the offer
    • Terms of raising securities (Duration, Rate of Dividend or interest, Mode of payment, etc.)
    • Proposed Time for which offer letter is valid
    • Purpose and objects of raising Capital
  3. Disclosures with regard to
    • Interest of Directors
    • Litigation or legal action, if any
    • Remuneration of Directors
    • Related party transactions
    • Summary of reservations or qualifications or adverse remarks of auditors
    • Details of any inquiry, inspections or investigations initiated or conducted
    • Details of acts of material frauds committed against the company and action taken by Company
  4. Financial Position of the Company
    • The capital structure of the company
    • Profits of the company
    • Dividends declared by the company
    • Audited Cash Flow Statement
    • Any change in accounting policies
  5. Required Declaration by Director
  6. Date and Place
  7. Attachments
    • Copy of Board Resolution
    • Copy of Special Resolution
    • Optional attachments, if any
Form PAS-4 Private Placement Offer Letter
Download Form PAS-4 directly from here
Download
Form PAS-4 Private Placement Offer Letter
Download Form PAS-4 directly from here
Download

FAQs

Does the Private Placement Offer Letter carry any right of renunciation?

The Private Placement Offer letter does not carry any right of renunciation. The person to whom the offer is made by the company can either accept the offer or reject the offer.

To how many persons can Private Placement offer be made?

The Private Placement Offer can be made to a maximum of 50 persons through a single offer. However, in a particular Financial year, this offer can be made to an aggregate of 200 persons.

Can a Company make a new Private Placement Offer without completing the existing offer?

No, a Company is not allowed to make another Private Placement offer unless it completes the existing one.

Got Questions? Ask Away!

  1. Hi @Anamika_Sharma

    Private Placement means an offer or invitation to subscribe securities to a specified group of persons by a company through the issue of Private placement offer letter.

    you can read more about provisions regarding Private Placements here:

    Hope this helps!