May 22, 2019

E-Form PAS-3 | Return of allotment of shares/securities

Share capital is that part of share which comes from allotment of shares, i.e., investment made by any person in the company through subscribing shares of such company. Companies Act, 2013 (“The Act”) requires company to inform by filling PAS 2 E Form about allotment of share to the Registrar of Company (“RoC”).

Provisions related to allotment of securities to public and private group and provisions of reporting related to allotment of shares is given u/s 39 and 42 of the Act read with Rule 12 and 14 of Companies (Prospectus and Allotment of Securities) Rules, 2014 (“The Rules”).

1. Manner of Allotment of Shares

1.1 Allotment of Securities by Companies to Public (Section 39 of the Act)

As per Section 39 of the act, a company may collect share capital through issuance of shares to public at large. However, such allotment will be subject to the conditions given in such section which are as follows:

A Company can’t allot shares through public subscription unless the amount stated as minimum subscription in the prospectus has been subscribed and application money related to such minimum subscription has been received by the company (Section 39(1))
Application money on security shall not be less than 5% of the nominal value of the security. SEBI may prescribe a different percentage. (Section 39(2))
If amount stated as minimum subscription has not been subscribed or such amount is not received within 30 days from date of issuance of prospectus then company is required to refund entire amount received within such time as may be prescribed. (Section 39(3))
Whenever a company makes allotment of securities then the Company shall intimate RoC about such allotment.

1.2 Allotment of securities on private placement (Section 42 of the Act)

As per section 42, a company may make allotment of share through private placement subject to the conditions given u/s 42 of the act. Major conditions are:

A company shall make private placement to select group of persons as identified by the Board (“Identified Persons”). Number of allottees shall not exceed 50 or such higher number as may be prescribed in a financial year. Shares allotted to the qualified institutional buyers and employees of the company shall not be considered in aforementioned number.
Company shall issue private placement offer and application in prescribed manner to identified persons. Company is required to record name and addresses of such identified persons.
Every identified person who is willing to subscribe such apply for allotment for shares alongwith subscription money either paid by cheque or Demand Draft or other banking channel.
A company can’t utilise money raised through private placement unless allotment is made and company has filed intimation about such allotment to RoC.
No fresh offer or invitation for private placement can be made till the time earlier issued any offer or invitation is pending.
Company shall make allotment of shares within 60 days of receipt of application money.
If company fails to make allotment of shares within 60 days then the company will be liable to refund such money to the subscribers within 15 days from expiry of such 60 days.
Money received on application under this section shall be kept in a separate bank account in a scheduled bank and shall not be utilised for any purpose other than—
- (a) for adjustment against allotment of securities; or
- (b) for repayment of monies where the company is unable to allot securities.
No company issuing securities under this section shall release any public advertisements or utilise any media to inform the public at large about such an issue.

2. Intimation of Allotment of shares to RoC

2.1 Allotment of shares to Public at large (Section 39(4) of the act read with Rule 12 of
The Companies (Prospectus and Allotment of Securities) Rules, 2014 )

As per Section 39(4) of the Act read with Rule 12 of the Rules, if a company makes allotment of shares to public at large then company shall file with the registrar a return of allotment of shares within 30 days in form PAS-3.

2.2 Allotment of shares through private placement (Section 42 of the act read with Rule 14 of The Companies (Prospectus and Allotment of Securities) Rules, 2014 )

Similarly, as per Section 42 of the act read with Rule 14 of the rules, if a company makes allotment of shares through private placement then the company shall file with the registrar a return of allotment in form PAS-3 within 15 days of allotment.

3. Information to be provided while filing form PAS-3

3.1 Allotment of shares to public at large

While filing intimation to the RoC about allotment of shares to the public at large, company shall provide following detailed information:

List of allottees containing their Name, address, occupation and number of securities allotted to each of the allottees.
If securities are allotted for consideration other than cash then the company shall file copy of contract (duly stamped) pursuant to which securities have been allotted.
If a contract is not reduced to writing, the company shall furnish particulars of contract stamped with same stamp duty as would have been applicable if the contract had been reduced to writing.
In case consideration is received in kind, a report of registered valuer should be attached.
In case of issue of bonus shares, a copy of resolution passed in general meeting authorizing issue of such shares should be attached.
If shares are issued by a company other than listed company to such person which are authorized by a special resolution then the company is required to attach report of registered valuer along with form.

3.2 Allotment of shares through private placement

While filing return of allotment of securities, company shall attach a complete list of all security holders containing:

Full name, address, permanent Account Number (PAN) and E-mail ID of such security holder
Class of security held
Date of allotment of security
Number of securities held, nominal value and amount paid on such securities; and particulars of consideration received if entire securities were issued for consideration other than cash.

4. Due date of filing of PAS-3

Due date to file return of allotment of shares is as follows:

Manner of allotment	Time limit of filing PAS-3
Allotment of shares to public at large	Within 30 days of allotment of shares
Allotment of shares through private placement	Within 15 days of allotment of shares

5. Information to be furnished in form PAS-3

Following information need to be entered in form PAS-3:

Corporate Identification Number (CIN)
Name of the company, address of registered office and email id of the company shall auto-populate based on CIN.
Securities allotted payable in cash:
Number of total allotment made (Details of maximum 5 allotments can be entered. If total number of allotment exceeds 5 then the company is required to file separate form for allotment beyond 5)
Date of allotment
Date of passing shareholder’s resolution
SRN of Form No. MGT-14
Nature of allotment-Preference shares/equity shares without differential rights/equity shares with differential rights/debentures
Details information about allotment
Securities allotted for consideration other than cash
- Number of total allotment made (Details of maximum 3 allotments can be entered. If total number of allotment exceeds 3 then the company is required to file separate form for allotment beyond 3)
- Date of allotment
- Date of passing shareholder’s resolution
- SRN of Form No. MGT-14
- Nature of allotment-Preference shares/equity shares without differential rights/equity shares with differential rights/debentures
- Details information about allotment
Details of consideration
Details of bonus shares
Details of private placement
Capital structure of the company after considering allotment.
Debt structure of the company after considering allotment
Whether complete list of allottees has been enclosed as an attachment

6. Fee applicable on filing of PAS-3

Amount of legal fee to be paid alongwith PAS-3 is based on share capital. Following is fee structure based on share capital:

Share capital	Fee Applicable
Less than INR 1,00,000	INR 200 per document
1,00,000 to 4,99,999	INR 300 per document
5,00,000 to 24,99,999	INR 400 per document
25,00,000 to 99,99,999	INR 500 per document
I,00,00,000 and above	INR 600 per document

However, in case of company without share capital, fee applicable is INR 200.

7. Additional Fee in case of delay in filing of PAS-3

If company fails to file PAS-3 within prescribed time then additional fee shall be applicable as follows:

Period of delays	Additional Fee
Up to 30 days	2 times of normal fees
More than 30 days and up to 60 days	4 times of normal fees
More than 60 days and up to 90 days	6 times of normal fees
More than 90 days and up to 180 days	10 times of normal fees
More than 180 days and up to 270 days	12 times of normal fees

8. Due date of filling PAS 3 Eform

PAS E form should be filled with in 15 days from the date of allotment.

9. Penalty in case of non-compliance of provisions related to allotment of shares

9.1 Allotment of shares to public at large (Section 39):

As per section 39(5) of the act, if company fails to file PAS-3 within 30 days from date of allotment then the company and the officer in default will be liable to penalty of INR 1,000 for each day during which defaults continues or INR 1,00,000, whichever is less.

9.2 Allotment of shares through private placement (Section 42):

As per section 42(9) of the act, If company defaults in filing of PAS-3 within the period prescribed under sub-section (8) then the company, its promoters and directors shall be liable to a penalty of INR 1,000 for each day during which such default continues but not exceeding INR 25 Lacs.

Download PAS 3 E form here

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DISCLAIMER: The views expressed are strictly of the author and VJM & Associates LLP. The contents of this article are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon.

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