Learn · 4 min read
PAS-3 deadlines: 15 or 30 days? The trap in the return of allotment
Which clock applies to your allotment
- Private placement / preferential (Sec 42, 62(1)(c))
- 15 days — Sec 42(8)
- Rights issue (Sec 62(1)(a))
- 30 days — Sec 39(4)
- Bonus issue
- 30 days
- ESOP exercise (Sec 62(1)(b))
- 30 days
- Penalty for default
- ₹1,000/day (company + promoters + directors), up to ₹25 lakh
PAS-3 is the return of allotment — the form that tells the ROC you issued shares, to whom, and for what consideration. Most founders have heard "30 days". For the round you just closed, that is probably wrong.
Almost every VC or angel round in India is a private placement under Section 42 (or a preferential allotment under 62(1)(c)). For those, Section 42(8) gives you 15 days from allotment, not 30. The 30-day clock under Section 39(4) applies to rights issues, bonus issues and ESOP exercises.
It gets sharper. The proviso to Section 42(4) says the application money you raised cannot be utilised until BOTH the allotment is made AND the PAS-3 return is filed. Close a round on the 1st, spend the money on the 10th without having filed — you have broken the law even inside the 15 days.
The default penalty is 1,000 rupees per day on the company, its promoters and its directors, capped at 25 lakh. For a seed-stage company, an avoidable five-figure penalty for a form nobody told you had a shorter clock.
This explainer is general information, not legal or tax advice. Statutes change and facts differ — confirm decisions with a practising CS/CA.
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