Preferential Allotment

Preferential Allotment means allotment of shares at a predetermined price to the identified people who are interested in taking shares in the company such as promoters, venture capitalists, financial institutions, buyers of company’s products or its suppliers.
Concept of Private Placement of Shares
Private placement means any offer of securities or invitation to subscribe securities to a select group of persons by a company (other than by way of public offer) through issue of private placement offer letter and which satisfies the conditions specified in this section.
Simple Defination -: securities offered to the selective group of persons by issuing private placement offer is known as the Private Placement of shares.|
Question-: What i s meant by private placement of shares? All India 2019; Compartment 2018  (APYQ)
Ans. Private placement of shares means selling of shares to a relatively small number of selected investors. Private placement is the opposite of a public issue, in which securities are made available for sale in the open market.”
Concept of Employees-Stock Option Plan (ESOP)
Employees Stock Option Plan (ESOP) means option granted by the company to its employees and employee directors to subscribe the shares at a price that is lower than the market price, fair value. It is an option or a right granted by the company but it is not an obligation on the employee to subscribe it.
* Employees Stock Option Plan is a category of Sweat Equity. Sweat Equity is a wider term than ESOP and includes issue of shares to promoters as remuneration for incorporating the company or for their other services
Some Conditions that  A company has to fulfil during  issue stock (shares) options .
(a) these shares are of the same class of shares already issued;
(b) it is authorised by a special resolution passed by the company;
(c) the resolution specifies the number of shares, the current market price, consideration, if any, and the class or classes of directors or employees to whom such equity shares are to be issued;
(d) not less than one year has, at the date of issue, elapsed since the date on which the company had commenced business; and
(e) these shares are issued in accordance with SEBI regulations, if the shares are listed.
Example-: What is meant by employee stock option plan? Delhi 2019;
All India (C) 2016 (APYQ)
Ans. Employees stock option plan is a plan whereby an option is given by the company to its whole time directors, officers and employees to purchase or acquire at a future date, a specified number of shares at a pre-determined
price, which is usually lower than the market price.