Definition of Private Placement



Private placement is the sale of shares only to selected parties other than the general public. It is one of the easy ways of raising finance without the disturbance of regulatory requirements. Just like initial public offering the shares are first sold to rich investors like banks for example.

 


The biggest advantage of the private placement is that there is no registration required with the security and exchange commission. Also, the minor shareholders are not required to be informed about the sale of stock and also there is an exemption of disclosure requirements for private placement specifically.

 

 


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