CA Inter P2 · Chapter 3 · Question 9 of 10
Which of the following is NOT permitted for a private placement under section 42?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Releasing a public advertisement about the offer through newspapers
Explanation
Section 42(7) prohibits a company making a private placement from releasing any public advertisement, or using any media, marketing or distribution channel or agent, to inform the public about the offer. Under section 42(4), subscription money must be paid by cheque, demand draft or other banking channel, not in cash. Offers to qualified institutional buyers are permitted.
More Prospectus and Allotment of Securities MCQs
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