VCFO Lite
Private placement share allotment after funding, PAS-4 and PAS-3
What this means, checked by a CA
After an investor agrees to fund you, the shares have to be issued in a strict legal sequence: valuation, board and shareholder approvals, a named offer letter, money into a separate bank account, allotment and the return of allotment. We run that sequence and file every form on time so the money can be used and the round is clean for the next investor.
Quote
Per round, fixed after a quick look
- Delivered in 10 to 15 working days from term sheet to allotment if valuation and documents are ready; PAS-3 within 15 days of allotment
- Due: Allot within 60 days of receiving application money; PAS-3 within 15 days of allotment; MGT-14 within 30 days of each resolution; allotment within 12 months of the special resolution
How we do it: IDFD
Every case runs through the same four steps: Information, Discussion, Forms, Deliverables. You see each one ticked as it happens.
InformationWhat we need from you · 9 items
Signed term sheet or SSA
Investor names, amount, price
Registered valuer's report
Price floor, before board resolution
Investor name, address, PAN, email
PAS-4, PAS-5 and PAS-3 data
Investor bank account details
Money must come from own account
Current AoA and authorised capital
Room to issue; AoA authority
Investor consent letters
Supporting document for allotment
Separate bank account for share money
Required to hold application money
DSCs of director and CS or professional
To sign MCA forms
FIRC, KYC and fair value certificateOptional
Only if a non-resident invests
DiscussionWhat we discuss · 6 items
Who exactly is investing, how much and in which class?
Named offerees only; one class at a time
Has any money already come in, and on what date?
60-day allotment clock starts on receipt
Is authorised capital enough for the new shares?
SH-7 first if not
Any non-resident or land-border country investor?
FC-GPR and possible approval
Does the AoA allow the issue and the investor rights?
AoA amendment may be needed
Physical or demat shares?
Certificates or ISIN and depository credit
FormsForms we file · 10 items
Valuation by registered valuer (and FEMA fair value certificate for non-residents)
Issue price must be at or above the valuer's price; number of shares = amount / issue price
Where: Registered valuer. Due: Before the first board meeting
If needed, increase authorised capital by ordinary resolution and file SH-7
MCA fee on the increase in authorised capital
Where: https://www.mca.gov.in. Due: Within 30 days of the resolution
First board meeting: approve issue, investor list, price per valuation, draft PAS-4, notice of general meeting; record names in PAS-5
Where: Company minutes and registers. Due: Day 1
File MGT-14 for the board resolution on issue of securities
Where: https://www.mca.gov.in. Due: Within 30 days of the board meeting
General meeting: pass special resolution with explanatory statement under Rule 14(1) and Rule 13; file MGT-14
Where: https://www.mca.gov.in. Due: MGT-14 within 30 days of the resolution; 21 days notice or shorter notice with consent
Open a separate bank account; send serially numbered PAS-4 to each named investor
Where: Scheduled bank; company. Due: PAS-4 within 30 days of recording names, after resolutions are filed
Receive money only by banking channel from each investor's own account; record the account
Where: Separate bank account. Due: Before allotment
Second board meeting: allot shares; update register of members
Where: Company. Due: Within 60 days of receipt of money; register within 7 days
File PAS-3 with list of allottees (name, address, PAN, email, class, date, number, amount paid), board resolution and valuation report
Where: https://www.mca.gov.in. Due: Within 15 days of allotment
Move money to the operating account; issue share certificates or credit demat; FC-GPR if non-resident
Where: Bank; depository; RBI FIRMS. Due: After PAS-3; certificates within 2 months; FC-GPR within 30 days of allotment
DeliverablesWhat you get · 5 items
MGT-14 SRNs and SH-7 SRN if filed
When: Within 30 days of resolutions
PAS-3 SRN and acknowledgement
When: Within 15 days of allotment
Share certificates or demat credit
When: Within 2 months of allotment
Updated register of members and cap table
When: Within 7 days of allotment
Compliance file (valuation, resolutions, PAS-4, PAS-5, bank proofs)
When: At closing
Questions people ask
When can we start using the investor's money?
Only after allotment and filing of PAS-3.
How soon must we file the return of allotment?
Within 15 days of allotment.
What if we cannot allot within 60 days?
Refund within the next 15 days; after that, 12% interest from the 60th day.
Is a special resolution needed in a private company?
Yes, for each private placement and for a preferential issue under Sec 62(1)(c).
How many investors can we offer to?
Up to 200 persons a year for each class of security, excluding ESOP holders and QIBs.
What happens if we break Sec 42?
Penalty up to the amount raised or ₹2 crore, whichever is lower, and refund to investors.
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