S. No.

Basis of Difference

Right Issue

Private Placement

Preferential Allotment

1.

Applicable Provisions Under Companies Act, 2013

Sec 62(1)(a)  read with rules

Section 42 read with rule 14 companies (Prospectus and allotment of securities) Rules, 2014

Sec 62(1)(c) read with rules 13 of Companies (share capital and debentures) Rules, 2014 and Section 42 read with rule 14 companies (Prospectus and allotment of securities) Rules, 2014

2.

Security issued

Equity Shares and Preference Shares

Equity Shares, Preference Shares and Debentures

Equity Shares and Preference Shares

3.

Person to whom the offer is made

Shares to be issued to existing Equity Shareholders in proportion to their existing shareholding.

Shares to be offered to investors or any selected group of people or any outsider (other than by way of public offer)

Can invite 50 people (max) at one time.

Can be offered to 200 people (max) in a year

 Shares can be issued to both, the existing shareholders as well as outsiders.

4.

Offer Period

Minimum Period- 15 days

Maximum Period- 30 days

(however in case of private company if consent from 90% of the shareholder then the offer period can be less then as defined above)

Minimum Period – No specific  period defined.

Maximum period – 365 days.

Minimum Period – No specific  period defined.

Maximum period – 365 days.

5.

Approval Required

Board Approval

Board & Shareholder approval

Board & Shareholder approval

6.

Format of offer letter

No specific format

PAS-4 (offer letter)

PAS-5 (Complete record)

PAS-4 (offer letter)

PAS-5 (Complete record)

*No such format in case of offer only to existing members.

7.

Forms to be filed

E-Form PAS-3 is required to be filed within 30 days of passing of Board resolution for the allotment of shares.

1.   E-Form MGT-14 is required to be filed within 30 days of passing of Special Resolution in general meeting.

2.   E-Form PAS -3 to be filed within 15 days of allotment of shares

1.   E-Form MGT-14 is required to be filed within 30 days of passing of Special Resolution in general meeting.

2.   E-Form PAS -3 to be filed within 15 days of allotment of shares

8.

Time Frame for allotment of securities

Within 60 days from the date of receipt of application money.

Within 60 days from the date of receipt of application money.

Within 60 days from the date of receipt of application money.

9.

Renunciation Rights

Shareholders have the right to Renounce / accept / reject the offer letter.

No such rights

No such rights

10.

Separate Bank Account

Not Required

Required

Required

11.

Valuation Report

Not mandatory

(Mandatory only in the case of issue of securities to non-resident shareholder)

Not mandatory

Mandatory

12.

Mode of receipt of Subscription money

Can be received in cash or through banking channel

Can be received only through Banking channel

Can be received in cash or through banking channel