Skip to content

CS Professional · Strategic Management and Corporate Finance · Raising of Funds - Private Funding

Under Section 42 of the Companies Act, 2013, a private placement offer-cum-application issued to an identified person carries which feature regarding transfer of the offer to someone else?

A private placement offer and application cannot be renounced. Section 42(3) provides that it shall not carry any right of renunciation, because the offer is made only to persons identified by the Board and is personal to them.

  1. AIt may be renounced in favour of any other person within thirty days
  2. BIt may be renounced only in favour of a promoter
  3. CIt may be renounced with the Board's approval
  4. DIt shall not carry any right of renunciationCorrect

Explanation

The proviso to Section 42(3) says the private placement offer and application shall not carry any right of renunciation. The offer is personal to the identified person who was selected by the Board. Renunciation rights belong to rights issues, not private placement.

Did you get it right without looking?

One question tells you little. A timed set on Raising of Funds - Private Funding shows your real accuracy, how long you take and where you lose marks.

Practise Raising of Funds - Private FundingFree diagnostic mock

More Raising of Funds - Private Funding questions