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Compliance Pack

Allotment of shares, PAS-3 (private placement or rights issue)

  • When the company issues new shares, it must file a return of allotment (PAS-3) with the ROC.
  • Deadline: PAS-3 within 15 days of allotment (private placement); 30 days for other allotments such as rights
  • Done in PAS-3 within 3 working days of allotment; full private placement 3 to 6 weeks
  • Prepared by your Savvy, checked by a CA
  1. Board and special resolutions
  2. Who is subscribing
  3. Check authorised capital
  4. PAS-3 SRN and challan
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Answer in brief

When the company issues new shares, it must file a return of allotment (PAS-3) with the ROC. For a private placement it is due in 15 days and the money cannot be used until then. We run the process from resolution and valuation to offer letter, allotment and PAS-3.

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From the official sources

What the law says, and what trips people up

From the official portal's manuals and FAQs, with the source for each point.

The law

  • Companies Act 2013, Sec 39(4) and 39(5)

    Every allotment by a company with share capital needs a return of allotment; default penalty ₹1,000 a day or ₹1 lakh, whichever is less, on company and officerSource

  • Companies (Prospectus and Allotment of Securities) Rules 2014, Rule 12

    Return of allotment in PAS-3 within 30 days, with list of allottees; stamped contract and registered valuer report for non-cash allotmentsSource

  • Companies Act 2013, Sec 42(6) and 42(8)

    Private placement: allot within 60 days of receiving money, else refund within 15 days or pay 12% interest; money kept in a separate bank account; PAS-3 within 15 days of allotmentSource

  • Companies Act 2013, Sec 42(4) proviso

    Money raised by private placement cannot be used until allotment is made and the return of allotment filedSource

  • Companies Act 2013, Sec 42(9) and 42(10)

    Late return: ₹1,000 a day up to ₹25 lakh; other contravention: penalty up to amount raised or ₹2 crore, whichever lower, and refund within 30 daysSource

  • Companies (Prospectus and Allotment of Securities) Rules 2014, Rule 14

    Special resolution for each offer; PAS-4 offer letter, serially numbered, sent within 30 days of recording names; up to 200 persons a year; record in PAS-5; money from subscriber's own bank account; PAS-3 within 15 daysSource

  • Companies Act 2013, Sec 62(1)(c) and Share Capital Rules, Rule 13

    Issue to persons other than existing members needs a special resolution and, for unlisted companies, a price based on a registered valuer's report; allot within 12 months of the resolutionSource

  • Companies Act 2013, Sec 62(1)(a)

    Rights issue: offer to existing members for 15 to 30 days with right to renounce; private companies may shorten with 90% members' consentSource

  • Companies (Prospectus and Allotment of Securities) Rules 2014, Rule 9B

    Private companies other than small companies must issue securities only in demat form (compliance date 30 Sep 2024)Source

  • Government fee

    Normal filing fee by nominal (authorised) share capital under the Companies (Registration Offices and Fees) Rules 2014: below ₹1,00,000: ₹200; ₹1,00,000 to below ₹5,00,000: ₹300; ₹5,00,000 to below ₹25,00,000: ₹400; ₹25,00,000 to below ₹1 crore: ₹500; ₹1 crore or more: ₹600. Source: https://vasai.icai.org/resources/Utilities/Penalty_for_Late_Filing_in_ROC/Penalty_for_Late_Filing_in_ROC.aspx For special resolutions, MGT-14 is charged on the same slab.

  • Late fee or penalty

    Additional fee as a multiple of the normal fee (Companies (Registration Offices and Fees) Amendment Rules 2022, from 1 July 2022): up to 30 days: 2 times; more than 30 to 60 days: 4 times; more than 60 to 90 days: 6 times; more than 90 to 180 days: 10 times; beyond 180 days: 12 times. Source: https://ca2013.com/wp-content/uploads/2022/01/Companies-Fees-Rules-2022.pdf Higher additional fee (3x, 6x, 9x, 15x, 18x) applies if PAS-3 is filed late on two or more occasions within 365 days. Source: https://ca2013.com/wp-content/uploads/2022/01/Companies-Fees-Rules-2022.pdf Penalties: Sec 39(5) ₹1,000 a day or ₹1 lakh, whichever is less (https://vasai.icai.org/detail/17418.aspx); for private placement Sec 42(9) ₹1,000 a day up to ₹25 lakh (https://ca2013.com/?p=976).

On the portal

  1. Login to MCA V3 (https://www.mca.gov.in) with the business user ID of the signing director or professional
  2. Check that the signatory's DSC is registered on V3 against the DIN or PAN or membership number used in the form
  3. Open e-form PAS-3 from the company e-filing forms list and enter CIN
  4. Select allotment type (private placement, preferential, rights, bonus, others) and enter allotment date and resolution details with MGT-14 SRN
  5. Enter securities allotted class-wise: number, face value, premium, amount paid, consideration
  6. Upload allottee list in the required format with PAN and email for each allottee
  7. Fill the web form; company data is prefilled from master data, so check it against records before moving on
  8. Upload attachments as PDF (2 MB per file, 10 MB total for most forms)
  9. Affix DSC of the company signatory and, where the form needs it, the certifying professional
  10. Submit, pay the fee shown (normal plus any additional fee) and note the SRN
  11. Track the SRN on the application dashboard; download challan and approval when issued

What trips people up

  • Paid-up capital not reflected in master data after PAS-3 approval

    Raise a complaint on the SRN; check event dates, since later-dated filings only update dataSource

  • Class-wise capital master missing or wrong

    The class-wise master is created only by the first SH-7 or PAS-3; file PAS-3 for each allotmentSource

  • Portal does not let you save PAS-3 and affix DSC, or PDF downloads blank

    Retry in a clean session; if it persists, raise a complaint before the 15 days run outSource

  • Using investor money before PAS-3 is filed

    Keep funds in the separate account until allotment and PAS-3 filingSource

  • DSC not registered or not associated with the DIN on V3

    Register the DSC on the signatory's V3 business user profile with the right role and DIN before signing; remove any old V2 association that blocks itSource

People ask

Is PAS-3 due in 15 days or 30 days?

15 days from allotment for private placement under Sec 42(8). Rule 12 gives 30 days for other allotments such as rights.Source

Can we use the money as soon as it arrives?

No. Private placement money stays in a separate account and can be used only after allotment and filing of the return.Source

What if we cannot allot within 60 days?

Refund within the next 15 days, or pay interest at 12% a year from the 60th day.Source

Do we need a valuation report?

Yes for issues to non-members by an unlisted company, from a registered valuer. A rights issue to existing members does not need one under Sec 62(1)(a).Source

Must the shares be in demat?

Yes for private companies that are not small companies, from 30 Sep 2024.Source

IDFD

How we solve it: 4 steps

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Step 1 of 4 · What we need from you

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  • Board and special resolutions
  • Registered valuer's valuation report
  • Allottee list with PAN, email, address
  • PAS-4 offer letters and PAS-5 record
  • Bank statement of separate account
  • Allottees' demat account detailsOptional
  • Rights offer letter and acceptancesOptional
  • Approved SH-7 if capital raisedOptional

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One time. Delivered in PAS-3 within 3 working days of allotment; full private placement 3 to 6 weeks. Due: PAS-3 within 15 days of allotment (private placement); 30 days for other allotments such as rights

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