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Need to Issue New Shares in Your Company?
Get complete share allotment assistance including PAS-3 filing within 15 days, board resolutions, share certificates, and statutory register updates. Expert CA/CS support starting at ₹3,999.
Simple Process
Here's How It Works
01
Fill the Form
Simply fill the above form to get started.
02
Call to discuss
Our startup expert will connect with you & complete legalities.
03
Issue Shares in Your Pvt Ltd Company
End-to-end share issuance filing: from authorized capital check to PAS-3 filing and share certificate issuance.
Pricing
Simple & Transparent Pricing
MOST POPULAR
Issue of Shares Filing Package 2026
From ₹3,999 one-time professional fee
Complete within 7 days
7-day turnaround 100% guaranteed
Form PAS-3 (Return of Allotment) Filing
Board Resolution and Allotment Resolution
Share Application Form Preparation
Share Certificate Generation
Register of Members Update
Register of Allotments Update
MCA V3 Portal Filing and Submission
Expert CA/CS Certification
Filing Confirmation with Updated MCA Master Data
Post-Filing Support and Compliance Guidance
*Government fees are additional and vary based on company structure
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IncorpX Prime
An all-inclusive solution for startups and expanding enterprises seeking a streamlined, compliant incorporation process.
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Application prepared and filed within 2 days.
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Important Notes
We strive to register your preferred business name whenever feasible.
Alternative name suggestions are provided if the preferred name is not approved.
Package includes first-year compliance services: auditor appointment, annual filings, and related obligations.
Issue of shares increases paid-up capital; file Form PAS-3 within 15 days of allotment on the MCA V3 portal
Six types recognized: rights issue (Section 62), private placement (Section 42), bonus shares (Section 63), sweat equity (Section 54), preferential allotment, and ESOP
Government fee: ₹200 to ₹600 based on nominal share capital; professional fee starts at ₹3,999
A practicing CA or CS must certify PAS-3 before MCA submission
Late filing penalty: ₹100 per day of delay; non-filing triggers Section 450 penalties (imprisonment up to 6 months, fine up to ₹5 lakh)
NRI/foreign investor allotment requires additional FC-GPR filing with RBI within 30 days under FEMA regulations
Issue of shares is the legal process by which a private limited company allots new equity or preference shares to existing shareholders or new investors, increasing paid-up share capital under the Companies Act, 2013. It is governed by Sections 42, 46, 54, 62, and 63 of the Act and regulated by the Ministry of Corporate Affairs (MCA).
Every private limited company that allots new shares must file Form PAS-3 (Return of Allotment) with the Registrar of Companies within 15 days of the allotment date. This is one of the tightest event-based compliance deadlines under MCA regulations. The process involves verifying authorized capital sufficiency, passing board resolutions, receiving subscription money, allotting shares, filing PAS-3, and issuing share certificates within 2 months. Six types of share issuance are recognized: rights issue (Section 62), private placement (Section 42), bonus issue (Section 63), sweat equity (Section 54), preferential allotment (Section 62(1)(c)), and ESOPs (Section 62(1)(b)). Failure to file PAS-3 within 15 days attracts a penalty of ₹100 per day of delay. IncorpX handles the complete process starting at ₹3,999, including documentation, MCA filing, and CA/CS certification.
Founders planning to register a private limited company and bring in investors or reward employees with equity should understand the share issuance process early. Whether you need to allot shares to a co-founder, raise a seed round through private placement, or issue bonus shares from accumulated reserves, the Companies Act prescribes a specific procedure for each type. This page covers the complete share allotment process for private limited companies in India, including all six issuance types, PAS-3 filing, government fees, and compliance requirements.
This page covers: Complete process for issuing new shares (equity, preference, sweat equity) in a private limited company under the Companies Act, 2013, including PAS-3 filing, documentation, government fees, state-wise stamp duty, and FEMA compliance for NRI allotments.
Not covered: Share buyback (Section 68), share transfer between existing shareholders (see share transfer filing), public limited company share issuance (SEBI-regulated), listed company rights/FPO issuance, debenture/bond issuance, and employee stock purchase plans (ESPP). For increasing authorized capital without issuing shares, see authorized capital increase filing.
Based on IncorpX's internal data from 4,500+ share issuance filings between 2020 and 2025:
38% of first-time filers discover their authorized capital is insufficient only after initiating the allotment process, adding 2 to 3 days and ₹3,000 to ₹8,000 in SH-7 filing costs
The top 3 RoC rejection reasons for self-filed PAS-3 are: incomplete allottee details (42%), DSC expiry or mismatch (31%), and arithmetic errors in share numbering (18%)
Private placement carries 4 times more compliance steps than a simple rights issue, yet 62% of startups choose it because they need to bring in external investors
Companies that file PAS-3 within 7 days of allotment have a 99.6% first-attempt approval rate vs 94.3% for Day 12 to 15 filers, because last-minute filings carry more errors
The average self-filing error rate is 12% to 15%, compared to 0.8% with professional CA/CS assistance
The Companies Act, 2013 recognizes six distinct methods for issuing shares. Each type has different resolution requirements, eligibility criteria, and compliance obligations. Startups raising VC funding typically use private placement, while existing shareholder investments follow the rights issue route.
Parameter
Rights Issue
Private Placement
Bonus Issue
Sweat Equity
Preferential
ESOP
Governing Section
62(1)(a)
42
63
54
62(1)(c)
62(1)(b)
Resolution Required
Board Resolution
Special Resolution
Ordinary Resolution
Special Resolution
Special Resolution
Special Resolution
Offered To
Existing shareholders
Up to 200 persons/FY
Existing shareholders
Directors/employees
Select persons
Employees
Payment
Cash at par or premium
Cash (banking channels)
Free (from reserves)
Non-cash/discount
Cash or non-cash
Cash/cashless
Valuation Required
No (at par)
No
No
Yes
Yes
Yes
Key Limit
15 to 30 day window
Max 200/FY; 60-day allotment
Must have free reserves
15% or ₹5 crore cap/year
Pricing norms apply
ESOP scheme needed
PAS-3 Deadline
15 days
15 days
15 days
15 days
15 days
15 days
Quick Decision Guide: Which Share Issuance Method Fits Your Situation?
Allotting shares to existing shareholders?
✅ At a price (par/premium) → Rights Issue - Board Resolution only, 7 to 8 days, lowest compliance
✅ Free from reserves → Bonus Issue - No cash needed, Ordinary Resolution, capitalizes free reserves
Bringing in a new investor or VC?
✅ Indian investor → Private Placement - Special Resolution + PAS-4, up to 200 persons/FY, 12 to 15 days
✅ NRI/Foreign investor → Private Placement + FEMA - FC-GPR filing with RBI, AD bank, 15 to 20 days
Compensating employees or directors with equity?
✅ For IP/know-how contribution → Sweat Equity - Company must be 1+ year old, valuation report mandatory
✅ Stock option scheme → ESOP - ESOP scheme required, Special Resolution, vesting period applies
Most startups use private placement for investor funding rounds and rights issue for existing shareholder investment. Bonus shares reward shareholders without cash outflow. Sweat equity works well for compensating founders and employees who contribute intellectual property or know-how. Not sure? Talk to our CA/CS team for a free recommendation.
Eligibility and Prerequisites for Share Allotment
Before allotting new shares, your company must meet specific prerequisites under the Companies Act, 2013. The most common reason for PAS-3 rejection is insufficient authorized capital, so verify this before starting.
Requirement
Detail
Company Status
Active on MCA portal (not struck off or dormant)
Authorized Capital
Must cover post-allotment paid-up capital (if insufficient, file SH-7 first)
Board Quorum
Minimum 2 directors present for board meeting
DSC
Active Class 3 DSC for authorized signatory
Sweat Equity Age
Company must be at least 1 year old (Section 54)
Private Placement Limit
Maximum 200 persons per FY (excluding QIBs and ESOP employees)
Private Placement Offers
Maximum 4 offers per financial year
Members Limit
Total members cannot exceed 200 after allotment (Section 2(68))
If authorized capital is insufficient, you must increase authorized capital by filing Form SH-7 BEFORE allotting shares. Filing PAS-3 without adequate authorized capital will be rejected by the RoC, and the allotment will be treated as irregular.
Step-by-Step Allotment of Shares Process
The share allotment process involves 8 steps and takes 7 to 15 working days depending on the type of issuance. Total cost starts at ₹4,199 (₹3,999 professional fee + ₹200 government fee for companies with up to ₹1 lakh share capital).
1 Capital Check SH-7 if needed
2 Valuation Report If at premium
3 Board Resolution Approve allotment
4 Special Resolution If PP/Sweat Eq.
5 Offer + Money PAS-4, banking
6 Allotment Update registers
7 File PAS-3 15-day deadline
8 Share Certificates Within 2 months
Step 1: Verify Authorized Capital Sufficiency
Check whether the company's authorized share capital (stated in the MoA) is sufficient to cover the new shares being issued. Compare the proposed post-allotment paid-up capital against the existing authorized capital. If authorized capital falls short, file Form SH-7 to increase authorized capital before proceeding.
Portal: mca.gov.in | Time: 2 to 3 working days if SH-7 filing is needed
Step 2: Obtain Share Valuation Report
For shares issued at a premium, preferential allotment, or sweat equity, obtain a valuation report from a registered valuer under Rule 11UA of the Income Tax Rules. The report determines the fair market value per share and is mandatory for premium pricing justification. Not required for rights issues at par value.
Cost: ₹3,000 to ₹10,000 | Time: 2 to 3 working days
Step 3: Pass Board Resolution for Share Allotment
Convene a board meeting and pass a resolution approving the issuance and allotment of shares. The resolution must specify the number of shares, face value, premium (if any), names of allottees, and the type of issuance (rights issue, private placement, bonus, etc.). Record the minutes in the Minutes Book.
Time: 1 working day
Step 4: Pass Special Resolution (If Required)
For private placement (Section 42), sweat equity (Section 54), and preferential allotment, pass a Special Resolution at an EGM or through postal ballot. File Form MGT-14 with the RoC within 30 days of passing the resolution. Special Resolution is not required for rights issues or bonus shares (Ordinary Resolution suffices).
Form: MGT-14 | Time: 1 to 2 working days
Step 5: Issue Offer Letters and Receive Subscription Money
Send offer letters (Form PAS-4 for private placement) to the proposed allottees. Receive subscription money via banking channels only; cash payments are not permitted. For private placement, allotment must happen within 60 days of receiving the application money, else refund within 15 days.
Form: PAS-4 (private placement) | Time: 1 to 3 working days
Step 6: Pass Allotment Resolution and Update Registers
After receiving subscription money, convene a board meeting to pass the allotment resolution confirming the allotment. Update the Register of Members (Form MGT-1), Register of Share Transfers, and Register of Allotments with details of each allottee, number of shares, and consideration received.
Time: 1 working day
Step 7: File Form PAS-3 with MCA
File Form PAS-3 (Return of Allotment) on the MCA V3 portal within 15 days from the date of allotment. Attach the board resolution, list of allottees, and valuation report (if applicable). The form requires a digital signature certificate (DSC) of the authorized signatory and certification by a practicing CA or CS.
Government fee: ₹200 to ₹600 | Time: 1 to 2 working days
Step 8: Issue Share Certificates
Issue share certificates to allottees within 2 months of allotment as per Section 46 of the Companies Act, 2013. Each certificate must bear a distinctive number, the company seal (if applicable), and signatures of at least two directors. Pay applicable state stamp duty on each certificate.
Time: 1 to 2 working days
Filing PAS-3 after 15 days triggers ₹100/day penalty. Many companies miss this deadline because they wait for share certificate issuance. File PAS-3 first, then issue certificates (you have 2 months for certificates but only 15 days for PAS-3).
A Bangalore-based SaaS startup engaged IncorpX to issue 10,000 equity shares at a ₹500 premium to an angel investor via private placement. Our team completed the entire process in 9 working days: Special Resolution and MGT-14 filing (Day 1 to 2), valuation report from a registered valuer (Day 3 to 5), board allotment resolution and PAS-3 filing on MCA V3 portal (Day 6 to 7), and share certificate issuance (Day 9). Total cost: ₹3,999 (professional fee) + ₹400 (government fee) + ₹5,000 (valuation report) = ₹9,399 all-inclusive.
Documents Required for Issue of Shares
Prepare the following documents before starting the share allotment process. All documents must be in PDF format for MCA V3 portal upload (maximum 6 MB per attachment).
General Documents (All Share Issuance Types):
#
Document
Purpose
Format
1
Company PAN Card
Identity verification for MCA filing
Scanned copy
2
Certificate of Incorporation
Company identity proof
Scanned copy
3
MoA and AoA (latest)
Authorized capital verification
Scanned/digital
4
PAN and Aadhaar of Allottees
Allottee identity verification
Scanned copy
5
Board Resolution Minutes
Allotment approval evidence
Signed PDF
6
Share Application Forms
Subscription evidence
Signed originals
7
Bank Statement/Receipt
Proof of money received
Bank-certified
8
DSC of Authorized Signatory
MCA portal filing
Active Class 3 DSC
Additional Documents by Share Issuance Type:
Type
Additional Documents Required
Private Placement
PAS-4 (offer letter), PAS-5 (record of offers), MGT-14 (Special Resolution filing), bank receipt within 60 days
Sweat Equity
Valuation report from registered valuer, Special Resolution, MGT-14 filing
Preferential Allotment
Valuation report, Special Resolution, MGT-14 filing, pricing justification
NRI/Foreign Investor
FC-GPR (RBI form), FEMA compliance certificate, AD bank remittance receipt
Based on our compliance team's experience with 4,500+ share allotment filings, the three most common reasons for PAS-3 processing delays are: (1) mismatch between authorized capital in MoA and proposed post-allotment paid-up capital, (2) incomplete board resolution minutes missing allottee details or share numbering, and (3) expired DSC of the authorized signatory. Prepare all documents in PDF format (max 6 MB per attachment for MCA V3 portal) before initiating the process.
PAS-3 Filing: Return of Allotment with MCA
Form PAS-3 is the statutory return filed with the Registrar of Companies after a company allots new shares. It records the details of shares allotted, allottee information, consideration type and amount, face value, and premium (if any). The form is filed on the MCA V3 portal and must be certified by a practicing CA or CS.
PAS-3 Government Fee Schedule:
Nominal Share Capital
Filing Fee
Up to ₹1,00,000
₹200
₹1,00,001 to ₹5,00,000
₹300
₹5,00,001 to ₹25,00,000
₹400
₹25,00,001 to ₹1,00,00,000
₹500
Above ₹1,00,00,000
₹600
PAS-3 Filing Process on MCA V3 Portal:
Log in to mca.gov.in with company credentials
Navigate to MCA Services, then E-Filing, and select Form PAS-3
Enter allotment details: date, number of shares, allottee information, consideration type
Attach board resolution, allottee list, and valuation report (if applicable)
Apply DSC of the authorized signatory
Submit for CA/CS certification and pay the government fee online
PAS-3 must be filed within 15 days of allotment. Not 15 days from board resolution. Not 15 days from receiving money. The clock starts from the DATE OF ALLOTMENT as recorded in the board minutes. A single day of delay costs ₹100 in additional fees.
Effective April 2025, the MCA V3 portal requires Aadhaar-linked mobile OTP verification for all company filing submissions, including PAS-3. Directors must ensure their DIN is linked to an active Aadhaar-verified mobile number before initiating the filing. Additionally, MCA has updated the PAS-3 form fields to include enhanced beneficial ownership disclosure for allotments above ₹10 lakh. IncorpX's filing team stays current with all portal changes to prevent submission rejections.
Issue of Shares Fees and Government Charges 2026
Understanding the complete cost breakdown helps you budget accurately. Here is the detailed fee structure for share issuance filing as of 2026:
Includes MGT-14, valuation report, higher govt fees
State-Wise Stamp Duty on Share Allotment:
State
Share Certificate Duty
On Capital Increase (SH-7)
Maharashtra
₹1/certificate
0.1% of increase amount
Delhi
₹1/certificate
0.15% of increase amount
Karnataka
₹1/certificate
0.1% of increase amount
Tamil Nadu
₹1/certificate
0.15% of increase amount
Gujarat
₹1/certificate
0.1% of increase amount
Uttar Pradesh
₹1/certificate
0.1% of increase amount
West Bengal
₹1/certificate
0.15% of increase amount
Rajasthan
₹1/certificate
0.1% of increase amount
Telangana
₹1/certificate
0.15% of increase amount
Kerala
₹1/certificate
0.1% of increase amount
Government fees and stamp duty are payable separately at actuals. The ₹3,999 professional fee covers the complete filing service including documentation, CA/CS certification, and post-filing support. No hidden charges.
Share Issuance Cost Estimator: Calculate Your Total Filing Cost
Use this scenario-based matrix to estimate the total cost for your specific share issuance type. Select the column that matches your requirement:
Cost Component
Scenario A: Simple Rights Issue
Scenario B: Private Placement (Indian)
Scenario C: Sweat Equity / Preferential
Scenario D: NRI/Foreign Allotment
IncorpX Professional Fee
₹3,999
₹3,999
₹3,999
₹5,999
PAS-3 Government Fee
₹200 to ₹600
₹200 to ₹600
₹200 to ₹600
₹200 to ₹600
MGT-14 Filing
Not needed
₹300 to ₹600
₹300 to ₹600
₹300 to ₹600
SH-7 (if capital increase)
₹3,000 to ₹8,000
₹3,000 to ₹8,000
₹3,000 to ₹8,000
₹3,000 to ₹8,000
Valuation Report
Not needed (at par)
Not needed (at par)
₹3,000 to ₹10,000
₹5,000 to ₹10,000
FC-GPR Filing (RBI)
N/A
N/A
N/A
₹2,000 to ₹5,000
Stamp Duty on Certificates
₹1/certificate
₹1/certificate
₹1/certificate
₹1/certificate
Total (without SH-7)
₹4,200 to ₹4,600
₹4,500 to ₹5,200
₹7,500 to ₹14,200
₹13,500 to ₹21,200
Processing Time
7 to 8 days
12 to 15 days
12 to 15 days
15 to 20 days
Estimates above assume no prior SH-7 filing is needed and government fees at the ₹5 lakh to ₹25 lakh share capital slab (₹400). If authorized capital increase is required, add ₹3,000 to ₹8,000 (SH-7 professional fee + state stamp duty at 0.1% to 0.15% of increase amount). DSC renewal (₹800 to ₹1,500) is additional if directors lack an active DSC. All government fees are at actuals and paid separately.
Issue of Shares at Par vs Premium
Shares can be issued at par (face value), at a premium (above face value), but never at a discount. Understanding the pricing mechanics is critical for proper documentation and accounting.
At Par: Shares issued at face value. For example, a ₹10 face value share is issued for ₹10. Common in rights issues to existing shareholders. No valuation report is needed, and the entire amount is credited to the Share Capital Account.
At Premium: Shares issued above face value. For example, a ₹10 face value share issued at ₹100 means ₹90 is the premium. Common in private placement and investor funding rounds. A valuation report from a registered valuer is mandatory. The premium amount is credited to the Securities Premium Account under Section 52 of the Companies Act, 2013.
At Discount: Prohibited under Section 53 of the Companies Act, 2013. Any shares issued below face value are void. The only exception is sweat equity shares under Section 54, issued to directors and employees with a Special Resolution and valuation report.
Practical Example: If your company issues 1,000 shares of ₹10 face value at ₹50 premium, total consideration = ₹60,000. Of this, ₹10,000 goes to Share Capital Account and ₹50,000 goes to Securities Premium Account.
Funds in the Securities Premium Account can be used for: issuing bonus shares, writing off share issue expenses, buying back shares, or redeeming preference shares (Section 52). These funds cannot be distributed as dividends.
When a closely held company (private limited) issues shares at a premium to a resident investor, the excess of issue price over fair market value is taxable as income under Section 56(2)(viib) of the Income Tax Act, 1961. This is commonly called the angel tax. DPIIT-recognized startups can claim exemption under the Angel Tax Exemption notification. A proper valuation report aligned with Rule 11UA is critical to avoid this tax liability.
Rights Issue vs Private Placement vs Bonus Issue
Choosing the right share issuance method depends on who you want to allot shares to, the compliance burden you can handle, and whether cash inflow is the objective. Here is a detailed comparison to help you decide. If you want to transfer existing shares to another person instead of issuing new ones, that follows a different process.
Parameter
Rights Issue
Private Placement
Bonus Issue
Governing Section
Section 62(1)(a)
Section 42
Section 63
Offered To
Existing shareholders only
Select persons (up to 200/FY)
Existing shareholders only
Payment
Cash at par or premium
Cash via banking channels
No payment (free from reserves)
Resolution
Board Resolution
Special Resolution + MGT-14
Board + Ordinary Resolution
Offer Letter
Notice to shareholders
Form PAS-4 mandatory
Not applicable
Acceptance Window
15 to 30 days
60 days for allotment
Not applicable
Valuation Report
Not mandatory (at par)
Not mandatory
Not required
Renunciation
Allowed (unless restricted by AoA)
Not allowed
Not applicable
Source of Shares
New issue
New issue
Capitalization of reserves
PAS-3 Deadline
15 days
15 days
15 days
Best For
Existing shareholder investment
New investor/VC funding rounds
Rewarding shareholders without cash outflow
Penalties for Late PAS-3 Filing
Form PAS-3 carries one of the tightest filing deadlines under MCA regulations. Missing it by even a single day triggers additional fees, and non-filing can result in criminal penalties for directors. Here is the penalty calculation:
Delay Period
Additional Fee (₹200 Normal Fee)
Additional Fee (₹600 Normal Fee)
Within 15 days
₹0 (on time)
₹0 (on time)
1 to 10 days late
₹100 to ₹1,000
₹100 to ₹1,000
11 to 20 days late
₹1,100 to ₹2,000 (max cap reached)
₹1,100 to ₹2,000
20+ days late (max cap)
₹2,000 (10x of ₹200)
₹6,000 (10x of ₹600)
Non-filing
Section 450: Imprisonment up to 6 months + fine up to ₹5 lakh for company and officers in default
A 30-day delay on PAS-3 for a company with ₹10 lakh authorized capital (normal fee ₹400) costs an additional ₹3,000 in late fees. That is 75% of the professional filing cost. Until PAS-3 is filed and approved, the share allotment is not reflected in MCA records, creating ownership disputes and audit issues.
Issue of Shares to NRI and Foreign Investors
Issuing shares to NRIs and foreign nationals requires additional compliance under the Foreign Exchange Management Act, 1999 (FEMA). The investment must come through an Authorized Dealer (AD) bank, and the pricing must be at or above fair market value. After allotment, the company must file both PAS-3 with MCA and FC-GPR with RBI.
FEMA Compliance Checklist for Foreign Share Allotment:
Step
Requirement
Timeline
1
Verify sector-wise FDI limit (automatic vs approval route)
Before offer
2
Obtain valuation report at fair market value (FMV)
Before allotment
3
Receive investment via Authorized Dealer (AD) bank
Shares issued to foreign investors must be priced at or above the fair market value (FMV) determined by a registered valuer or a SEBI-registered merchant banker. Issuing shares below FMV to foreign investors violates FEMA regulations and can attract RBI penalties and compounding proceedings.
A Delhi-based fintech startup needed to allot 25,000 equity shares at ₹200 premium per share (₹10 face value) to an NRI investor based in Dubai via private placement. IncorpX managed the complete FEMA compliance process in 18 working days: Special Resolution and MGT-14 filing (Day 1 to 3), valuation report at fair market value from a registered valuer (Day 4 to 7), coordination with the Authorized Dealer (AD) bank for FDI remittance receipt verification (Day 8 to 12), PAS-3 filing with MCA (Day 13 to 14), and FC-GPR filing with RBI (Day 15 to 18). Total investment received: ₹52.5 lakh. Total filing cost: ₹5,999 (professional fee) + ₹500 (govt fee) + ₹8,000 (valuation) + ₹3,000 (FC-GPR) = ₹17,499 all-inclusive. The investor's shareholding was updated on MCA master data within 48 hours of PAS-3 approval.
Why Choose IncorpX for Share Issuance Filing?
Based on our experience processing 4,500+ share allotment filings, we understand that the 15-day PAS-3 deadline leaves no room for error. Here is what sets IncorpX apart:
4,500+ Filings Completed
Proven track record across rights issues, private placements, bonus shares, sweat equity, and NRI allotments. Zero rejection rate on properly documented filings.
Dedicated CA/CS Team
Every PAS-3 form is certified by a practicing Chartered Accountant or Company Secretary. Professional certification is included in the ₹3,999 package.
100% Online Process
No physical paperwork required. We handle MCA V3 portal filing, document preparation, and digital submission from start to finish.
15-Day Deadline Guaranteed
We prioritize PAS-3 filings to meet the 15-day statutory deadline. Most filings are submitted within 7 to 8 working days of engagement.
End-to-End Documentation
Board resolutions, share application forms, allotment resolutions, share certificates, and statutory register updates are all included.
NRI/FEMA Expertise
Specialized support for share allotment to foreign investors, including FC-GPR filing with RBI, FEMA compliance, and AD bank coordination.
"We needed to issue shares to three angel investors within a tight 10-day window to close our seed round. IncorpX's team completed the private placement documentation, PAS-3 filing, and share certificates in just 8 working days. The CA certification and MCA filing were handled end-to-end with zero back-and-forth. Highly professional."
- Vikram M., Co-Founder, SaaS startup (Bangalore) | 10,000 shares allotted via private placement, February 2025
IncorpX Share Issuance Performance Data (FY 2024-25)
Performance Metric
Data
Total Share Issuance Filings Completed
4,500+ (cumulative since 2019)
First-Attempt PAS-3 Approval Rate
99.2%
Average Completion Time (Rights Issue)
7.4 working days
Average Completion Time (Private Placement)
11.8 working days
Client Satisfaction Score
4.8/5 (based on 1,200+ reviews)
Cities Served
280+ cities across India (100% online process)
NRI/Foreign Allotments Handled
350+ (with FC-GPR compliance)
Average Client Response Time
Under 2 hours during business hours
IncorpX offers a 100% re-filing guarantee: if your PAS-3 is rejected due to any error attributable to our team, we re-file at zero additional professional cost and cover RoC re-submission fees. With a 99.2% first-attempt approval rate across 4,500+ filings, this guarantee is rarely invoked, but it provides complete peace of mind for your share issuance filing.
Frequently Asked Questions About Issue of Shares (2026)
These FAQs cover everything from the allotment of shares procedure and PAS-3 filing deadlines to government fees, share issuance types, and NRI compliance requirements. Whether you are a director raising capital, a startup issuing shares to investors, or a CS handling share allotment for clients, these answers will guide you through the process.
Issue of shares is the process of allotting new shares by a company to existing shareholders or new investors under the Companies Act, 2013. It increases the paid-up share capital and requires filing Form PAS-3 (Return of Allotment) with the Registrar of Companies within 15 days of allotment. Companies can issue equity shares, preference shares, or sweat equity shares.
Form PAS-3, called Return of Allotment, is the statutory form filed with the MCA after a company allots new shares. It must be filed within 15 days of the allotment date under the Companies (Prospectus and Allotment of Securities) Rules, 2014. The form records allottee details, share numbers, consideration received, and must be certified by a practicing CA or CS.
Return of allotment is the official MCA filing (Form PAS-3) that a company submits within 15 days of allotting new shares. It serves as a public record of the allotment and updates the RoC's register. The return includes allottee names, number of shares, face value, premium paid, and the type of consideration (cash or non-cash). Government fee ranges from ₹200 to ₹600.
Private placement under Section 42 of the Companies Act, 2013 allows a company to offer shares to a select group of up to 200 persons per financial year (excluding QIBs and ESOP employees). It requires a Special Resolution, offer letter in Form PAS-4, and allotment within 60 days of receiving application money. Maximum 4 offers per year.
Rights issue under Section 62 of the Companies Act, 2013 allows a company to offer new shares to existing shareholders in proportion to their current holdings. Shareholders get a 15 to 30 day acceptance window and can renounce their rights to another person. Only a Board Resolution is needed; no Special Resolution is required.
Bonus share issue under Section 63 of the Companies Act, 2013 allows a company to issue fully paid-up shares to existing shareholders without any payment. Shares are capitalized from free reserves, securities premium account, or capital redemption reserve. Requires a Board Resolution and Ordinary Resolution. Bonus shares cannot be issued from revaluation reserves.
Sweat equity shares under Section 54 of the Companies Act, 2013 are issued to directors or employees at a discount or for non-cash consideration (intellectual property, know-how, value additions). The company must be at least 1 year old. Annual cap is 15% of paid-up capital or ₹5 crore (whichever is higher) with an overall cap of 25% and a 3-year lock-in period.
Preferential allotment is the issue of shares to a select group of persons on a preferential basis under Section 62(1)(c) of the Companies Act, 2013. It requires a Special Resolution, a valuation report from a registered valuer, and compliance with pricing guidelines. Filing Form MGT-14 (within 30 days) and Form PAS-3 (within 15 days of allotment) is mandatory.
No. Under Section 53 of the Companies Act, 2013, a company cannot issue shares at a discount to the face value. Any shares issued below face value are treated as void. The only exception is sweat equity shares under Section 54, which can be issued at a discount to employees and directors with a Special Resolution and registered valuer's report.
After the Companies (Amendment) Act, 2015, there is no minimum paid-up capital requirement for a private limited company. Previously, the minimum was ₹1 lakh. A company can now have as low as ₹1,000 in paid-up capital. However, the authorized capital in the MoA must be sufficient to cover any new shares being issued.
A private limited company can issue shares up to its authorized share capital stated in the Memorandum of Association (MoA). There is no statutory cap on the number of shares, but the maximum number of members is limited to 200 under Section 2(68). To issue shares beyond authorized capital, the company must first file Form SH-7 to increase it.
A valuation report from a registered valuer is mandatory for preferential allotment, sweat equity shares, and shares issued for non-cash consideration. It determines the fair market value per share under Rule 11UA of the Income Tax Rules. A valuation report is not required for rights issues at par value or bonus share issues. Cost ranges from ₹3,000 to ₹10,000.
Issue shares in 8 steps: (1) verify authorized capital, (2) obtain valuation report if at premium, (3) pass Board Resolution, (4) pass Special Resolution if private placement, (5) issue offer letters, (6) receive subscription money, (7) file Form PAS-3 within 15 days, and (8) issue share certificates within 2 months. Total processing time is 7 to 15 working days. Professional fees start at ₹3,999.
Form PAS-3 must be filed with the RoC within 15 days from the date of share allotment under the Companies (Prospectus and Allotment of Securities) Rules, 2014. Late filing attracts an additional fee of ₹100 per day of delay. The maximum additional fee is capped at 10 times the normal filing fee. Non-filing can lead to penalties under Section 450.
The PAS-3 filing due date is 15 days from the date of allotment. For example, if shares are allotted on 1st June, PAS-3 must be filed by 16th June. There is no annual filing window; the due date is event-triggered. Late filing incurs ₹100/day additional fees. The form is filed on the MCA V3 portal and requires a practicing CA/CS certification.
Required documents include: PAN card and Aadhaar of all allottees, Board Resolution minutes, Special Resolution (for private placement/sweat equity), share application forms, valuation report (for premium/preferential allotment), PAS-4 offer letter (for private placement), company PAN, CoI, and latest MoA/AoA. Directors need active DSC for MCA filing.
To increase paid-up capital, issue new shares through rights issue, private placement, or bonus issue and file Form PAS-3 within 15 days. If the current authorized capital is insufficient, first file Form SH-7 to increase authorized capital by amending the MoA. SH-7 filing requires a Special Resolution and state-specific stamp duty (typically 0.1% to 0.15% of the increase amount).
Yes, shares can be issued for non-cash consideration such as intellectual property, technical know-how, or other assets. This is common in sweat equity (Section 54) and preferential allotment. However, a valuation report from a registered valuer is mandatory to determine the fair value. For private placement under Section 42, consideration must be received through banking channels only.
Log in to mca.gov.in V3 portal, navigate to MCA Services then E-Filing, and select Form PAS-3. Enter allotment details: date, number of shares, allottee information, consideration type, and face value. Attach board resolution and valuation report. The form requires DSC of an authorized signatory and certification by a practicing CA or CS. Government fee is ₹200 to ₹600.
Yes, directors can receive shares through rights issue (as existing shareholders), private placement, sweat equity (Section 54), or preferential allotment. For sweat equity, the director must be a current employee or director. The company must follow the applicable procedure for the chosen issuance type, including board/special resolutions and PAS-3 filing within 15 days.
Issue of shares filing costs include: professional fees starting at ₹3,999 (covers board resolutions, PAS-3 filing, share certificates), MCA government fee of ₹200 to ₹600 based on nominal share capital, and state stamp duty on share certificates (₹1 per certificate in most states). Additional costs apply if SH-7 filing (₹300 to ₹600), valuation report (₹3,000 to ₹10,000), or MGT-14 filing is needed.
PAS-3 government fees depend on nominal share capital: ₹200 (up to ₹1 lakh), ₹300 (₹1 lakh to ₹5 lakh), ₹400 (₹5 lakh to ₹25 lakh), ₹500 (₹25 lakh to ₹1 crore), and ₹600 (above ₹1 crore). Late filing attracts an additional ₹100 per day of delay, capped at 10 times the normal fee.
Yes, stamp duty applies on share certificates issued after allotment. Rates vary by state: typically ₹1 per certificate in Maharashtra, Delhi, Karnataka, Tamil Nadu, and most other states. Stamp duty on increase of authorized capital (SH-7 filing) is more significant, typically 0.1% to 0.15% of the increase amount depending on the state.
The IncorpX ₹3,999 package includes: drafting board resolutions for allotment, share application form preparation, allotment resolution, PAS-3 filing with MCA within 15 days, share certificate generation, statutory register updates (Register of Members, Register of Allotments), and end-to-end CA/CS expert support. Government fees and stamp duty are payable separately.
The complete share issuance process takes 7 to 15 working days. Simple rights issues at par value can be completed in 7 to 8 days. Private placement with Special Resolution and valuation takes 12 to 15 days. If authorized capital increase (SH-7) is needed, add 2 to 3 additional days. PAS-3 filing itself is processed within 24 to 48 hours on the MCA portal.
Yes, Form PAS-3 must be certified by a practicing Chartered Accountant (CA) or Company Secretary (CS) before filing on the MCA V3 portal. The professional certifies that allotment complies with the Companies Act, 2013 and applicable rules. IncorpX's ₹3,999 package includes expert CA/CS certification as part of the filing service.
Late PAS-3 filing attracts an additional government fee of ₹100 per day of delay beyond the 15-day deadline. This is capped at 10 times the normal filing fee (maximum ₹2,000 to ₹6,000 depending on share capital). Non-filing can trigger penalties under Section 450: imprisonment up to 6 months and a fine up to ₹5 lakh for directors in default.
Yes, PAS-3 is filed entirely online through the MCA V3 portal at mca.gov.in. You need a company login, DSC of the authorized signatory, and certification by a CA/CS. The form accepts digital attachments (board resolution, valuation report). IncorpX handles the complete 100% online process starting at ₹3,999 with no physical paperwork required.
Authorized capital is the maximum share capital a company can issue, stated in the MoA. Paid-up capital is the actual amount received from shareholders for shares issued. Authorized capital is always equal to or greater than paid-up capital. To issue shares beyond authorized capital, the company must first file Form SH-7 with the RoC and pay state stamp duty.
A rights issue (Section 62) offers shares to existing shareholders proportionate to their holdings, needs only a Board Resolution, and allows renunciation. Private placement (Section 42) offers shares to select persons (up to 200/year), requires a Special Resolution, Form PAS-4 offer letter, and 60-day allotment deadline. Private placement has more compliance requirements.
Bonus shares (Section 63) are issued free to existing shareholders by capitalizing reserves; no payment is required. Rights issue (Section 62) offers new shares to existing shareholders at a price (par or premium); shareholders must pay. Bonus shares need an Ordinary Resolution and free reserves; rights issue needs only a Board Resolution and fresh subscription money.
Form PAS-4 is the private placement offer letter sent to proposed allottees under Section 42, containing offer terms, number of shares, price, and payment details. Form PAS-5 is the record of private placement offers maintained by the company. PAS-4 goes to investors; PAS-5 stays with the company. Both are required only for private placement, not for rights or bonus issues.
Yes, NRIs and foreign nationals can subscribe to shares in an Indian private limited company under FEMA regulations. Shares must be issued at or above fair market value. The company must file Form FC-GPR with the RBI through an Authorized Dealer bank within 30 days of allotment. Investment must come through banking channels, and the sector must allow FDI under automatic or approval route.
To issue shares to a foreign investor: (1) verify the sector allows FDI under automatic or approval route, (2) obtain a valuation report at fair market value, (3) receive investment via an Authorized Dealer (AD) bank, (4) file PAS-3 with MCA within 15 days, and (5) file FC-GPR with RBI within 30 days. IncorpX handles FEMA compliance for NRI share allotments.
Non-filing of Form PAS-3 triggers penalties under Section 450 of the Companies Act, 2013: imprisonment up to 6 months and a fine up to ₹5 lakh for the company and every officer in default. Additionally, the share allotment is not reflected in MCA records, creating ownership disputes. Late filing attracts ₹100/day additional fees capped at 10 times the normal fee.
PAS-3 is filed online on the MCA V3 portal at mca.gov.in regardless of company location. Your company's jurisdictional Registrar of Companies (RoC) processes the filing. There is no physical submission required. IncorpX handles PAS-3 filing for companies registered across India starting at ₹3,999 with 100% digital processing and expert certification.
Professional CA/CS-assisted PAS-3 filings achieve a 99.2% first-attempt approval rate based on IncorpX data from 4,500+ filings. The remaining 0.8% face queries from the RoC, typically for incomplete attachments or mismatched allottee details. Self-filed PAS-3 forms show a significantly higher rejection rate of 12% to 15% due to technical errors in form fields and missing professional certifications.
Yes. A newly incorporated company can issue additional shares immediately after incorporation provided the authorized capital in the MoA is sufficient. There is no mandatory waiting period for rights issue or private placement. However, sweat equity shares under Section 54 require the company to be at least 1 year old from the date of incorporation. Most startups issue shares to co-founders or angel investors within the first 3 to 6 months.
Two accounting entries are required: (1) Debit Bank Account with total consideration received, (2) Credit Share Capital Account with face value and Credit Securities Premium Account with the premium amount. For example, issuing 1,000 shares of ₹10 face value at ₹90 premium: debit Bank A/c ₹1,00,000; credit Share Capital ₹10,000 and Securities Premium ₹90,000. The Securities Premium Account has restricted usage under Section 52.
Not always. Rights issue (Section 62) requires only a Board Resolution with no shareholder approval. Bonus shares (Section 63) need a Board Resolution plus an Ordinary Resolution. However, private placement (Section 42), sweat equity (Section 54), and preferential allotment all require a Special Resolution passed at an EGM or through postal ballot, plus MGT-14 filing within 30 days.
Allotting shares beyond authorized capital is a serious compliance violation. The allotment is treated as irregular and void. The RoC will reject the PAS-3 filing, and the company must refund the subscription money with interest. To regularize, the company must first file Form SH-7 to increase authorized capital, pay state stamp duty, and then re-execute the allotment. IncorpX recommends verifying authorized capital sufficiency as the first step in every share issuance.
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4.9/5
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4.9/5
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4.6/5
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5/5
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4.9/5
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5/5
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4.9/5
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Dia
5/5
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