Corporate and Other LawsMCQQuestion 12523 of 300
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Under Section 42 of the Companies Act, 2013 read with Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014, what is the maximum number of persons to whom an offer of private placement can be made in a financial year (excluding QIBs and employees under ESOP)?

Select Your Answer (Keyboard: A, B, C, D)
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Correct Answer

✅ Option A — Not more than 200 persons in aggregate in a financial year

All Options:

  • ANot more than 200 persons in aggregate in a financial year ✓
  • BNot more than 50 persons in aggregate in a financial year
  • CNot more than 100 persons in aggregate in a financial year
  • DNot more than 500 persons in aggregate in a financial year

Detailed Solution & Explanation

Correct Answer: Option **A** (Not more than 200 persons in aggregate in a financial year) **Statutory Provision (Section 42 - Offer or Invitation for Subscription of Securities on Private Placement):** Rule 14(2)(b) stipulates that an offer or invitation for private placement shall be made to not more than 200 persons in the aggregate in a financial year, excluding qualified institutional buyers and employees offered securities under employee stock option scheme. Therefore, Option A is the correct legal position under the ICAI curriculum.

More Questions from Corporate and Other Laws

Under Section 77(1) of the Companies Act, 2013, within what initial statutory period must a company register a charge created on its property or assets with the Registrar of Companies (ROC)?

Under Rule 3(3) of the Companies (Acceptance of Deposits) Rules, 2014, what is the maximum aggregate limit of deposits that an eligible public company can accept from its members and the public?

Which of the following is a requirement for a company to buy back its securities under the Companies Act, 2013?

What is the tax treatment of buyback of shares by an unlisted company?

Explain the concept of differential rights and its significance in the context of buyback of securities.

What are the legal provisions governing the buyback of securities by a company in India?

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