In case of private placement of shares to raise the amount of capital a company ........

General Accounting Principles Accounting for Shares

In case of private placement of shares, to raise the amount of capital a company :

invites the public through prospectus

does not invite the public

invites the public through advertisement

invites the public through memorandum of association

- In private placements, companies raise capital by selling securities to a select group of investors, not the general public.

- Option 1: Invites the public through prospectus

- This method is typical for public offerings, not private placements.

- Option 2: Does not invite the public

- Private placements do not involve a public invitation and are targeted at a limited number of investors.

- Option 3: Invites the public through advertisement

- Advertisements are used to reach the public, which is contrary to the nature of private placements.

- Option 4: Invites the public through memorandum of association

- A memorandum is a foundational document and not a vehicle for public invitations.

Correct Answer: Option 2: Does not invite the public

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