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of <h1>Section 42 of Companies Act 2013: Rules for Private Placement of Securities and Penalties for Non-Compliance.</h1> Section 42 of the Companies Act, 2013 governs the private placement of securities by companies. It allows companies to issue securities to a select group of identified persons, not exceeding fifty or a prescribed higher number, excluding qualified institutional buyers and employees under stock option schemes. The private placement must follow prescribed conditions, and offers cannot be publicly advertised. Application money must be paid through non-cash methods and kept in a separate bank account until securities are allotted. Companies must allot securities within sixty days of receiving application money, or refund it with interest. Non-compliance results in penalties and the offer being treated as a public offer.
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