How to issue and allot shares in a Private Limited Company with PAS 3 and stamping timelines?

Talk to our Expert Team – Call +91 72999 72500

How to issue and allot shares in a Private Limited Company with PAS 3 and stamping timelines in India is a common query for both new and existing companies. When a company decides to bring in new investors or increase its share capital, it must follow the legal procedure prescribed under the Companies Act, 2013. The key steps involve passing a board resolution, issuing offer letters to shareholders or investors, receiving the share application money, allotting the shares, filing PAS-3 with the Ministry of Corporate Affairs (MCA), and paying the applicable stamp duty within the prescribed timelines. Each stage has specific forms, deadlines, and compliance requirements to avoid penalties and maintain corporate transparency.

Issuing and allotting shares is a formal process where a Private Limited Company offers new shares to its shareholders or new investors and records the ownership change. After receiving the share application money in the company’s bank account, the Board of Directors must conduct a meeting to approve the allotment and pass necessary resolutions. The company is then required to file Form PAS-3 with the MCA within 30 days of allotment, attaching the list of allottees and a copy of the board resolution. Along with PAS-3, share certificates must be prepared and stamped according to the respective state stamp duty laws, typically within 30 days of allotment. Failing to meet these deadlines may attract penalties for both the company and its directors.

For a smooth and compliant share issuance process, companies should maintain a clear checklist of actions. First, obtain approval from the board to issue new shares and decide on the number, price, and type of shares. Next, send an offer letter to existing shareholders if the issue is a rights issue or to specific investors in case of a private placement. Collect the share application money through proper banking channels to maintain traceability. After the application period, convene a board meeting to approve the allotment of shares and pass a resolution. File Form PAS-3 online on the MCA portal within 30 days of allotment, attaching the required documents. Finally, issue stamped share certificates to all allottees within 60 days of allotment to complete the process legally.

Many companies find it challenging to manage PAS-3 filing and stamping timelines because different states have varying stamp duty rates and payment methods. For example, some states require e-stamping, while others mandate physical stamping of share certificates. The stamp duty is generally calculated on the face value of shares and must be paid within 30 days from the date of allotment to avoid penalties. Professional assistance ensures accurate calculations and timely filings.

❓ What is the deadline to file PAS-3 after share allotment?
👉 PAS-3 must be filed within 30 days from the date of allotment.

❓ How soon should share certificates be issued after allotment?
👉 Share certificates must be issued and stamped within 60 days of allotment.

❓ Is stamp duty the same in all states?
👉 No, stamp duty rates vary from state to state and depend on the authorized share capital.

Talk to our Expert Team – Call +91 72999 72500

Want to issue or allot shares without missing any legal deadlines? FilingPoint.com provides expert assistance with PAS-3 filing, stamping, and share certificate preparation. Get a Free Compliance Checklist and talk to our Chartered Accountants today to complete your share allotment in a hassle-free way.