Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting for Shares

Question:

The company issued 50000 shares to their parent company is an example of ______.

Options:

Public Issue

Private Placement

 ESOP

Issue other than cash

Correct Answer:

Private Placement

Explanation:

The Companies Act, 2013 (Section 42)describes Private Placement as an offer of securities or invitation to subscribe securities to a select group of persons through issue of private placement offer letter.