Form PAS-3: Return of Allotment of Shares

When PAS-3 is required

Every allotment of shares or other securities must be reported to the Registrar through PAS-3. The deadline depends on the route used to issue the shares, so identify the route before the board allots. The table shows the usual timelines.

Bonus shares are also reported in PAS-3, even though no money is received. Allotments to subscribers at incorporation are not reported in PAS-3, because they are captured in SPICe+ and confirmed through INC-20A.

Attachments

The Registrar checks that the allotment followed the correct process, so the attachments mirror the approvals. The form is certified by a practising CA, CS or cost accountant, who verifies these documents before certifying.

• List of allottees with names, addresses, PAN and shares allotted
• Certified copy of the board resolution for allotment
• Special resolution and MGT-14 SRN, for private placement or preferential issue
• Private placement offer letter (PAS-4) and record (PAS-5), where applicable
• Valuation report, where shares are issued for consideration other than cash
• Contract or agreement for non-cash consideration

Fees and higher additional fee

The normal fee is ₹200 to ₹600 based on nominal capital. A late filing attracts the standard additional fee, 2x the normal fee for up to 30 days and up to 12x beyond 180 days.

Since 1 July 2022, PAS-3 is one of two forms with a higher additional fee. If a company files PAS-3 late on two or more occasions within 365 days of the last late filing, it pays 3x to 18x the normal fee in place of the ordinary additional fee. Companies that raise money in tranches should track deadlines carefully.

Penalties

Section 39(5) provides that for default in filing the return of allotment, the company and every officer in default are liable to a penalty of ₹1,000 for each day the default continues, or ₹1 lakh, whichever is less.

For private placements, Section 42 adds stricter consequences. A default in filing the return within 15 days makes the company, its promoters and directors liable to a penalty of ₹1,000 per day of default, up to ₹25 lakh. Money raised through private placement must also not be used until the return of allotment is filed.

Common mistakes and connected filings

Allotment also has to match what the company actually received. For a private placement, application money must be received in a separate bank account and shares allotted within 60 days of receipt, failing which the money must be refunded within 15 days.

Errors include allotting beyond authorised capital, allotting before the money is received in a separate bank account for private placement, mismatched allottee details, and missing valuation reports. Where shares go to a foreign investor, FEMA reporting in Form FC-GPR is due within 30 days of allotment on the RBI FIRMS portal. Non-small private companies must also issue securities in demat form under Rule 9B. Refogo's partner professionals can file PAS-3 and FC-GPR for a fixed fee.

Step by step

1. 1Check capital headroom

   Confirm authorised capital is sufficient; file SH-7 first if not.

2. 2Pass approvals

   Board and, where needed, special resolution with MGT-14.

3. 3Receive money

   Collect subscription money through banking channels.

4. 4Allot shares

   Board allots shares and records the allotment.

5. 5File PAS-3

   Attach allottee list and approvals within 15 or 30 days, with professional certification.

6. 6Issue certificates or credit demat

   Issue share certificates or credit shares to demat accounts.