Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting for Shares

Question:

An issue of shares by a company which is not a public issue but offered to a selected group of persons is called.............

Options:

Privileged Offer

Private Placement

Initial Public offer

None of the above

Correct Answer:

Private Placement

Explanation:

The correct answer is option 2- Private Placement.

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.