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Private Placement of Shares

As per Section 81 (1A) of the Companies Act, private Placement of Shares means an issue which is not a public issue. It is an issue which is made to the selected group of persons. Private placement of shares cannot be made unless a special resolution (75% or more shareholders must agree) has been passed for it. Where only ordinary resolution (agreed by more than 50% of the shareholders) is passed in such a case, the board of directors can make an application to the Central Government for obtaining approval for the issue.

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