Meaning of preferential allotment of shares It is a process using which companies allots their shares to a group of people or interested companies on preferential basis. Bulk allotment of shares is done to individuals, venture capitalists or group of interested people. A company wants to raise funds to carry out different functional or operational activities. Also it may be looking for expansion or starting with new unit. Issuing securities to public at large scale is a tedious process and is time consuming as well. In order to save this time and raise funds in an efficient manner companies opt for preferential allotment of shares. To do so less paper work is required and thus companies can raise funds in less time. Both private and public companies can make such allotment but more rules and regulations are applicable to public companies. Meaning of private placement In common language we can say that private placement is a funding event in which securities are sold ...
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