PAS-3 (return of allotment)

• Every company having share capital that allots securities
• Every company that allots securities under a private placement, which files on the shorter 15-day window

• section 39(4)read the provision
• Companies (Prospectus and Allotment of Securities) Rules, 2014, rule 12(1)read the provision
• section 42(4) and (8)read the provision
• Companies (Prospectus and Allotment of Securities) Rules, 2014, rule 14(6)read the provision
• MCA e-filing page for Form PAS-3

• Pass the Board or committee resolution that allots the securities.
• Prepare the complete list of allottees.
• Get the valuation report if the securities are issued for a consideration other than cash.
• Get the PAS-4 private placement offer letter and the PAS-5 record of the offer if the allotment is under a private placement.
• Confirm that the application money sits in a separate bank account if the allotment is under a private placement.

1. 1Log in to the MCA21 V3 portal as a business user.
2. 2Open Form PAS-3.
3. 3Select the type of allotment.
4. 4Enter the date of allotment. This date starts the 30-day or 15-day window.
5. 5Attach the list of allottees.
6. 6Attach the Board resolution.
7. 7Attach the valuation report if the consideration is other than cash.
8. 8Sign the form with the digital signature of an authorised signatory.
9. 9Pay the filing fee.
10. 10Submit the form. Use 15 days for a private placement and 30 days for any other allotment.
11. 11Do not use the money received under a private placement before the form is filed.

MCA21 V3 portal

The two routes carry different amounts, and the private placement one is far heavier. For a general allotment, section 39(5) sets a penalty for each default of ₹1,000 for each day the default continues or ₹1 lakh, whichever is less, on the company and on its officer in default. For a private placement, section 42(9) sets a penalty for each default of ₹1,000 for each day the default continues, capped at ₹25 lakh, and it reaches the company, its promoters and its directors. So the same late filing can cost ₹1 lakh or ₹25 lakh depending on which route the allotment took.

• Section 42(4) bars the company from using the money raised through a private placement until the return of allotment is filed, so a late PAS-3 freezes the funds the issue was meant to release
• Where the company also fails to allot within sixty days of receiving the application money, section 42(6) requires repayment within fifteen days of that period and then interest at 12% a year from the expiry of the sixtieth day
• An offer or acceptance of money in contravention of section 42 carries a separate penalty under section 42(10) of up to the amount raised or ₹2 crore, whichever is lower, plus refund with interest within thirty days of the order