When a company in India issues shares to raise capital, it must comply with legal requirements under the Companies Act 2013. One key compliance step is filing Form PAS-3, a "Return of Allotment" with the Registrar of Companies (ROC). This article explains Form PAS-3 in simple terms, covering its purpose, requirements, and process.

What is Form PAS-3?

Form PAS-3 is a mandatory document filed by companies to inform the ROC about the allotment of shares (i.e., distributing shares to investors). It ensures transparency and legal compliance.

• Governing Laws:

  • Section 39(4) of the Companies Act 2013: Requires companies to submit allotment details to the ROC. This applies to all types of allotments, including public offers, private placements, preferential issues, and bonus shares.

  • Rule 12 of the Companies (Prospectus and Allotment of Securities) Rules, 2014: Specifies Form PAS-3 for this purpose.  Rule 12 provides the procedural framework (Form PAS-3) to fulfill this obligation.

When is Form PAS-3 Required?

Companies must file PAS-3 within 15 days of allotting shares in the following cases:

1. Initial Public Offer (IPO): First-time share issuance to the public.

2. Private Placement: Shares offered to a select group (not the public).

3. Bonus Shares: Free shares given to existing shareholders.

4. Right Issue: Shares offered to existing shareholders first.

5. Preferential Allotment: Shares issued to specific investors (e.g., venture capitalists).

Details Included in Form PAS-3

The form captures:

1. Company Details: Name, CIN (Corporate Identity Number), registered office address.

2. Allotment Information:

   • Date of allotment.

   • Type of shares (equity/preference).

   • Number of shares allotted, nominal value, and premium (if any).

3. Shareholder Details: Names, addresses, PAN, and shares allotted to each investor.

4. Payment Details: Total amount received, increase in paid-up capital.

5. Signatures: Directors and Company Secretary (CS) must sign the form.

Documents to Attach

• Board resolution approving the allotment.

• PAS-1 (if shares were issued via private placement).

• Copy of share certificates.

• Bank payment proof (e.g., challan).

• CS certification confirming legal compliance.

Deadlines and Penalties

• Timeline: File within 15 days of allotment.

• Late Fees: ₹100 per day for delays, capped at ₹5 lakh.

• Penalties: Officers in default may face fines up to ₹1,000/day (max ₹5 lakh).

Form PAS-3 is a critical compliance step for companies issuing shares. Timely filing ensures smooth operations, avoids penalties, and maintains trust with stakeholders. Companies should consult professionals (like CS or lawyers) to ensure accuracy and adherence to deadlines.