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

Under the Companies Act, 2013, a company making a private placement offer must allot the securities within a fixed period from the date of receipt of application money. What is that period?

The company must allot securities within sixty days from the date of receipt of application money. If it cannot, it must refund the money within fifteen days after those sixty days expire, failing which interest at twelve per cent per annum is payable.

  1. AFifteen days
  2. BThirty days
  3. CSixty daysCorrect
  4. DNinety days

Explanation

Section 42(6) requires allotment within sixty days from receipt of application money. Fifteen days is the period for filing the return of allotment with the Registrar (and the refund window after the sixty days), so it is not the allotment period.

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