PAS-3 Return of Allotment for Shares Issued to Foreign Investors

Written by CA Nandini, Krystal7 Consultants. Last updated 1 October 2026.

Form PAS-3 is the return of allotment a company files with the Registrar of Companies after it allots shares or other securities. Rule 12 of the Companies (Prospectus and Allotment of Securities) Rules, 2014 gives 30 days from allotment. A private placement, which includes a preferential allotment, gets only 15 days under section 42(8) of the Companies Act, 2013. When the allottee is a foreign investor, the company also files FC-GPR on FIRMS within 30 days of the issue.

This page covers the due dates, attachments, fees, penalties and the order of filings next to FC-GPR. It ends with a worked example for a Delaware parent, a checklist and 15 FAQs.

What is Form PAS-3?

Form PAS-3 is the return of allotment that section 39(4) of the Companies Act, 2013 requires. Every company with a share capital files it with the Registrar of Companies (ROC) after each allotment of securities. It tells the ROC who received the securities, how many, at what price and for what consideration. The company files it on the MCA V3 portal.

Rule 12 of the Companies (Prospectus and Allotment of Securities) Rules, 2014 (the PAS Rules) prescribes the manner. It names Form PAS-3, sets the 30 day limit and requires a certified list of allottees. The return covers equity shares, compulsorily convertible preference shares (CCPS) and debentures alike.

A foreign allottee does not change the MCA form. It adds a second return under the Foreign Exchange Management Act, 1999 (FEMA). The company reports the same allotment to the Reserve Bank of India (RBI) in Form FC-GPR, through its authorised dealer (AD) bank.

Four terms recur on this page:

• Allotment: the board resolution that appropriates securities to a named person. Its date starts the PAS-3 clock and the FC-GPR clock.

• Private placement: an offer of securities to identified persons through a PAS-4 offer letter under section 42.

• Preferential allotment: an issue under section 62(1)(c) to persons chosen by special resolution. For an unlisted company it must also follow section 42.

• FC-GPR: the form an Indian company files on RBI's FIRMS portal to report equity instruments issued to a person resident outside India.

Point	Detail	Source
Form	PAS-3, return of allotment	Rule 12(1), PAS Rules
Who files	Every company having a share capital that allots securities	Section 39(4)
Due date for most allotments	30 days from the date of allotment	Rule 12(1)
Due date for a private placement, including a preferential allotment	15 days from the date of allotment	Section 42(8)
Normal fee (INR)	200 to 600, by nominal share capital	Companies (Registration Offices and Fees) Rules, 2014
Additional fee if late	2 to 12 times the normal fee; 3 to 18 times on a repeat delay	Table of fees as substituted by G.S.R. 12(E), 11 Jan 2022
Penalty if late, ordinary allotment	INR 1,000 a day, up to INR 1,00,000, on the company and each officer in default	Section 39(5)
Penalty if late, private placement	INR 1,000 a day, up to INR 25,00,000, on the company, its promoters and directors	Section 42(9)
Parallel FEMA return	FC-GPR within 30 days from the date of issue	Regulation 4(1), FEMA 395/2019-RB

When is PAS-3 due?

PAS-3 is due within 30 days of the allotment under rule 12(1) for a rights issue, bonus issue, ESOP allotment or conversion. A private placement, including every preferential allotment by an unlisted company, has 15 days under section 42(8). Both clocks start on the allotment date. The date the money arrives does not move them.

Section 42(8) requires the return "within fifteen days from the date of the allotment". A preferential allotment falls under it. Section 62(1)(c) makes the issue subject to "the applicable provisions of Chapter III", and section 42 sits in Chapter III.

Count the days as the law counts them. Section 9 of the General Clauses Act, 1897 excludes the first day when a period runs "from" a date. So an allotment on 21 Oct 2026 has a 15 day return due by 5 Nov 2026. A 30 day return on the same allotment is due by 20 Nov 2026.

The allotment date is the date of the board resolution that allots. Section 179(3)(c) lets the board issue securities only by a resolution at a board meeting. We diary both deadlines in the minutes of that meeting.

Route	Section	PAS-3 due (days from allotment)	Penalty section for a late PAS-3
Rights issue	62(1)(a)	30	39(5)
Preferential allotment by an unlisted company	62(1)(c) read with 42	15	42(9)
Private placement of CCPS or debentures	42	15	42(9)
Allotment on exercise of ESOPs	62(1)(b)	30	39(5)
Bonus issue	63	30	39(5)
Equity allotted on conversion of CCPS or CCDs	Terms of the original issue; 62(3) for debentures	30 (our reading, because the conversion follows the original offer)	39(5)
Shares issued for consideration other than cash, by preferential allotment	62(1)(c) read with 42	15	42(9)

Shares taken by the subscribers to the memorandum at incorporation are a separate case. The Act treats them apart from allotments. Section 56(4)(a) times their certificates from incorporation, while section 56(4)(b) uses the allotment date. The SPICe+ incorporation filing records the subscribers and their shares.

We do not file PAS-3 for them, and we found no MCA circular that asks for one. FC-GPR is still due within 30 days of issue. RBI's FIRMS user manual lists "Subscription to Memorandum of Association" as a type of issue in FC-GPR.

What attachments does PAS-3 need for each type of allotment?

Every PAS-3 carries a list of allottees with names, addresses, occupations and securities allotted, certified by the signatory as complete and correct. Rule 12(7) adds a registered valuer's report for a section 62(1)(c) issue by an unlisted company. Rules 12(3) to 12(5) add a stamped contract and a valuation of the consideration for a non cash allotment.

For a foreign allottee, we copy the legal name exactly from the Foreign Inward Remittance Certificate (FIRC) and give the registered address abroad.

A non cash allotment without a written contract needs stamped particulars of the deal under rule 12(4). The ROC may then ask for adjudication of the stamp duty under section 31 of the Indian Stamp Act, 1899.

Allotment type	Approval and MGT-14	Attachments to PAS-3	FEMA side
Rights issue, 62(1)(a)	Board resolution at a meeting; a private company files no MGT-14 for it (G.S.R. 464(E), 5 Jun 2015)	List of allottees; in our practice, the board resolution and the letter of offer as optional attachments	FC-GPR within 30 days; parent's own entitlement priced at no less than the resident price
Preferential allotment, 62(1)(c) with 42	Special resolution; MGT-14 within 30 days and before PAS-4 goes out (rule 14(8))	List of allottees; registered valuer's report (rule 12(7)); in our practice, the special resolution, PAS-4 and PAS-5 as optional attachments	FC-GPR within 30 days; price at or above fair value
Private placement of CCPS or CCDs, 42	Special resolution; MGT-14 before PAS-4	List of allottees; registered valuer's report where 62(1)(c) applies; in our practice, PAS-4 and PAS-5 as optional attachments	FC-GPR within 30 days; conversion formula fixed upfront
ESOP allotment, 62(1)(b)	Scheme approved by members; board allots on exercise	List of allottees; in our practice, the resolution approving the scheme as an optional attachment	Form ESOP within 30 days of issuing options to non residents (regulation 4(4), FEMA 395/2019-RB); FC-GPR on allotment after exercise
Bonus issue, 63	Board recommendation and members' authorisation	List of allottees; the bonus resolution is no longer a required attachment (rule 12(6) omitted in 2023)	Permitted for existing foreign holders under rule 7 of the NDI Rules; FC-GPR within 30 days
Conversion of CCPS or CCDs	Terms approved at issue; board resolution to convert	List of allottees; in our practice, the board resolution as an optional attachment	Conversion at the formula fixed at issue (Master Direction paras 4.6 and 4.7); ask the AD bank about a fresh FC-GPR
Consideration other than cash, 62(1)(c) with 42	Special resolution; MGT-14	Stamped contract or stamped particulars; registered valuer's report on the consideration; list of allottees	FC-GPR within 30 days

RBI's FIRMS user manual lists bonus shares, shares issued on exercise of ESOPs and conversion of convertible notes as types of issue in FC-GPR. So each needs FC-GPR within 30 days of allotment. For an ESOP allotment, the FC-GPR quotes the Form ESOP reference. The manual has no separate type for converting CCPS or CCDs, which the company reported in FC-GPR when it issued them. We ask the AD bank before the conversion whether it wants a fresh FC-GPR.

Form PAS-3 itself asks for more than rule 12. G.S.R. 37(E) of 20 Jan 2023 substituted the form from 23 Jan 2023. The substituted form asks for the date of the shareholders' resolution and the SRN of the MGT-14 that filed it. It captures the registered valuer's details, including the registration number and the date of the report. It ends with a certificate by a Chartered Accountant, Cost Accountant or Company Secretary in whole time practice.

The printed form lists four attachments: the list of allottees, the valuer's report if any, the contract for a non cash allotment, and optional attachments. It has no separate slot for PAS-4 or PAS-5. So for a private placement we attach them, with the resolutions, as optional attachments. Read the live V3 form on the MCA portal before you file.

Rule 12(6) once required the bonus resolution as an attachment. The same G.S.R. 37(E) omitted it from 23 Jan 2023, and older guides still list it.

For an ESOP, section 62(1)(b) and rule 12 of the Companies (Share Capital and Debentures) Rules, 2014 call for a special resolution. G.S.R. 464(E) relaxes some section 62 steps for private companies. Check its entry for section 62(1)(b), as amended, before you rely on an ordinary resolution. We pass a special resolution and file MGT-14, which works on either reading.

Two valuation reports, two purposes

A preferential allotment to a foreign investor usually needs two valuations under two laws. One person can sign both only with both qualifications.

Point	Companies Act valuation	FEMA valuation
Law	Section 62(1)(c); rule 13, Companies (Share Capital and Debentures) Rules, 2014	Paragraph 8.1.1, Master Direction on Foreign Investment in India
Who signs	Registered valuer under section 247	Chartered Accountant, SEBI registered merchant banker or practising cost accountant
Needed for	Preferential allotment; non cash consideration	Issues where the fair value floor applies, such as a preferential allotment or renounced and unsubscribed rights shares
What it fixes	The issue price the special resolution approves	The floor: the foreign investor pays at least fair value
Filed with	PAS-3 (rule 12(7))	FC-GPR on FIRMS
Method	Chosen and reported by the registered valuer	Any internationally accepted pricing method on an arm's length basis

Our valuation reports service arranges both from one data pack.

How does a private placement to a foreign parent run under section 42?

The members pass a special resolution and the company files MGT-14. The board records the parent's name in PAS-5 and sends a PAS-4 offer letter within 30 days. The parent pays from its own bank account into a separate account. The board allots within 60 days, PAS-3 follows within 15 days, and the money stays unused until PAS-3 is on file.

Section 42 and rule 14 of the PAS Rules set the steps:

1. Special resolution first. Rule 14(1) needs a special resolution for each offer. Rule 13 of the Share Capital Rules adds the valuer's report and a 12 month window to allot.
2. MGT-14 before the offer letter. Rule 14(8) allows a PAS-4 only after the special resolution is filed with the Registry. G.S.R. 464(E) disapplies section 117(3)(g) for private companies, which covers board resolutions only.
3. PAS-5 and PAS-4. PAS-5 is the company's record of private placement offers. Rule 14(3) requires the PAS-4 within 30 days of recording the names. Section 42(3) bars renunciation of the offer.
4. At most 200 persons. Section 42(2) and rule 14(2) cap offers at 200 persons a financial year. Qualified institutional buyers and ESOP employees do not count.
5. No cash, own account. Section 42(4) requires a banking channel, and rule 14(5) the subscriber's own bank account. A group treasury company cannot pay for the parent.
6. Separate account. Section 42(6) requires a separate bank account in a scheduled bank. We open it with the AD bank before the remittance.
7. 60 days to allot. Section 42(6) gives 60 days from receipt, then 15 days to refund, with 12 percent interest after that. Regulation 3 of FEMA 395/2019-RB sets the same limits.
8. No spending before PAS-3. The proviso to section 42(4) bars use of the money until allotment and the PAS-3 filing.
9. No publicity. Section 42(7) bars public advertisements and marketing channels.

A land border link adds a step. G.S.R. 338(E) of 5 May 2022 inserted a proviso in rule 14(1). It bars an offer to a body corporate incorporated in, or a national of, a country sharing a land border with India. The bar lifts once the investor holds government approval under the Foreign Exchange Management (Non Debt Instruments) Rules, 2019 (NDI Rules). The approval goes with the PAS-4.

We have the investor state in its PAS-4 application whether it needs this approval, and we attach the approval where it does.

The NDI (Amendment) Rules, 2026 (S.O. 2174(E), 1 May 2026) changed the beneficial owner test. It now uses the thresholds in rule 9(3) of the Prevention of Money Laundering (Maintenance of Records) Rules, 2005, or control. The test sits in Explanation 2 to rule 6(a) of the NDI Rules. The Cabinet release of 10 Mar 2026 keeps non controlling beneficial ownership of up to 10 percent on the automatic route. We trace the parent's ownership chart before PAS-4 goes out.

A rights issue avoids most of this. Our note on a rights issue by an Indian subsidiary to its foreign parent covers that route. There, PAS-3 has 30 days and no PAS-4 or PAS-5 applies.

How do PAS-3 and FC-GPR fit together?

PAS-3 and FC-GPR report one allotment to two regulators. PAS-3 goes to the ROC under company law, within 30 days or 15 days of allotment. FC-GPR goes to RBI through the AD bank within 30 days of the issue, under regulation 4(1) of FEMA 395/2019-RB. Neither form legally waits for the other, but their figures must match.

Regulation 4(1) applies when an Indian company issues equity instruments to a person resident outside India and the issue counts as foreign direct investment. For an unlisted subsidiary, every issue to its foreign parent counts. RBI's FIRMS user manual defines the date of issue as the date of allotment, the same date that starts the PAS-3 clock.

Point	PAS-3	FC-GPR
Law	Section 39(4) and rule 12; section 42(8) for a private placement	Regulation 4(1), FEMA 395/2019-RB
Regulator	Registrar of Companies, Ministry of Corporate Affairs	Reserve Bank of India, through the AD bank
Portal	MCA V3	FIRMS
Trigger	Any allotment of securities by a company with share capital	Issue of equity instruments to a person resident outside India, counted as FDI
Due	30 days from allotment; 15 days for a private placement	30 days from the date of issue
Who submits	The company, signed by an authorised director or the company secretary with a digital signature certificate (DSC)	The company, through its business user on FIRMS
Main attachments	List of allottees, valuer's report, non cash contract; resolutions, PAS-4 and PAS-5 as optional attachments	FIRC and KYC report, valuation certificate, company secretary's certificate, declaration, any government approval
Government fee	INR 200 to INR 600	None when filed on time
If late	Additional fee plus penalty under section 39(5) or 42(9)	Late submission fee within 3 years; compounding after that
Review	ROC	AD bank, then RBI

In our practice, we file PAS-3 first on a private placement, because its 15 day clock is shorter. Some AD banks ask us for the PAS-3 filing receipt with the FC-GPR.

The allotment date, share count, price, allottee name and consideration must match across PAS-3, FC-GPR, the register of members and the FIRC. We usually have the Indian resident director sign PAS-3, because that director already holds a DSC.

Our FC-GPR filing guide walks through the FIRMS steps. Our note on allotting shares to a foreign shareholder covers the FEMA checks before allotment.

In what order should the filings go?

For a preferential allotment the rules fix the order. Valuation comes first, then the board meeting, special resolution, MGT-14, PAS-5 and PAS-4. The remittance, allotment, PAS-3 and FC-GPR follow, and only then may the company use the money. A rights issue skips the special resolution, MGT-14, PAS-4 and PAS-5, and gives 30 days for PAS-3.

Step	Action	Deadline or rule	Law
1	Check the entry route, the sectoral cap and any land border beneficial owner	Before the board meeting	Master Direction para 3.2; NDI Rules as amended 1 May 2026
2	Obtain the registered valuer's report and the FEMA valuation certificate	Before the board meeting	Rule 13, Share Capital Rules; Master Direction para 8.1.1
3	Raise authorised capital if needed, and file SH-7	SH-7 within 30 days of the members' resolution	Sections 61 and 64
4	Board approves the issue, the explanatory statement and the notice of the general meeting	Resolution at a meeting	Section 179(3)(c)
5	Members pass the special resolution	Allot within 12 months of it	Sections 42 and 62(1)(c); rule 13
6	File MGT-14	Within 30 days, and before PAS-4	Section 117; rule 14(8)
7	Record the allottee in PAS-5	Before the offer	Rule 14(4)
8	Send the PAS-4 offer letter	Within 30 days of recording the name	Rule 14(3)
9	Allottee pays from its own account into the separate account	After it receives the PAS-4	Sections 42(4) and 42(6); rule 14(5)
10	Collect the FIRC and KYC report from the AD bank	As soon as the money lands	Our practice
11	Board allots the shares	Within 60 days of receipt	Section 42(6); regulation 3, FEMA 395/2019-RB
12	File PAS-3	Within 15 days of allotment	Section 42(8)
13	File FC-GPR	Within 30 days of allotment	Regulation 4(1), FEMA 395/2019-RB
14	Credit the demat account; the depository collects stamp duty	Within 2 months of allotment	Section 56(4)(b); rule 9B, PAS Rules
15	Move the money to the operating account	Only after PAS-3 is filed	Proviso to section 42(4)
16	Report the allotment in the annual return and the FLA return	MGT-7 for the year; FLA by 15 July	Section 92; RBI FLA instructions

Our paid up capital increase service runs either sequence end to end.

What fee and stamp duty apply?

The PAS-3 fee depends on the company's nominal share capital. Under the Companies (Registration Offices and Fees) Rules, 2014, it runs from INR 200 to INR 600. Stamp duty on the issue is 0.005 percent of the consideration, and the depository collects it on a demat issue.

Nominal share capital is the authorised capital in the memorandum, as section 2(8) defines it. So the fee follows the authorised capital, whatever the size of the allotment.

Nominal share capital (INR)	PAS-3 fee (INR)
Less than 1,00,000	200
1,00,000 to less than 5,00,000	300
5,00,000 to less than 25,00,000	400
25,00,000 to less than 1,00,00,000	500
1,00,00,000 or more	600

PAS-3 itself carries no stamp duty. The duty falls on the issue of shares at 0.005 percent. Schedule I of the Indian Stamp Act, 1899 sets that rate, as amended from 1 Jul 2020. For an issue in demat form the depository collects it, as the Government's release of 30 Jun 2020 explains. A company that still issues physical certificates pays the duty itself.

Rule 9B of the PAS Rules requires demat issues from every private company that is not a small company. That covers every foreign owned subsidiary once its rule 9B date has passed. A non cash allotment adds a second stamp cost, because rule 12(3) requires a stamped contract. FC-GPR carries no fee when the company files it on time.

What happens if PAS-3 is filed late?

A late PAS-3 costs two separate amounts. MCA charges an additional fee of 2 to 12 times the normal fee, or 3 to 18 times on a repeat delay within 365 days. The company and its officers also face a penalty of INR 1,000 a day. The cap is INR 1,00,000 under section 39(5), or INR 25,00,000 under section 42(9) for a private placement.

The additional fee comes from the table of fees as substituted by the Companies (Registration Offices and Fees) Amendment Rules, 2022 (G.S.R. 12(E), 11 Jan 2022), in force from 1 Jul 2022.

Delay after the due date	Additional fee (multiple of the normal fee)	Higher additional fee (multiple of the normal fee)	Amount at a normal fee of INR 600 (INR)
Up to 30 days	2	3	1,200 or 1,800
More than 30 and up to 60 days	4	6	2,400 or 3,600
More than 60 and up to 90 days	6	9	3,600 or 5,400
More than 90 and up to 180 days	10	15	6,000 or 9,000
Beyond 180 days	12	18	7,200 or 10,800

Note 1 to the table, as substituted by G.S.R. 12(E), names only two forms for the higher additional fee: INC-22 and PAS-3. It applies when a company files either form late on two or more occasions within 365 days of filing the last belated one. Note 2 drops the ordinary additional fee when the higher one applies. Note 3 ignores forms filed before the 2022 amendment.

Section 403(2) keeps the penalty alive after the additional fee is paid. The penalty depends on the route.

Default	Who is liable	Penalty	Source
PAS-3 late on a rights issue, bonus, ESOP allotment or conversion	The company and each officer in default	INR 1,000 for each day, or INR 1,00,000, whichever is less	Section 39(5)
PAS-3 late on a private placement or preferential allotment	The company, its promoters and directors	INR 1,000 for each day, up to INR 25,00,000	Section 42(9)
Offer made or money accepted in breach of section 42	The company, its promoters and directors	Up to the amount raised or INR 2,00,00,000, whichever is lower, plus refund with interest within 30 days of the order	Section 42(10)
Penalty order not complied with within 90 days	The company; officers in default	Company: fine of INR 25,000 to INR 5,00,000. Officer: up to 6 months' imprisonment, or a fine of INR 25,000 to INR 1,00,000, or both	Section 454(8)

Section 42(9) names promoters as well as directors. Section 2(69)(b) defines a promoter to include a person "who has control over the affairs of the company". The clause adds "directly or indirectly whether as a shareholder, director or otherwise".

On our reading, a parent that holds 99 percent of the shares may meet that test. Section 454(3)(a) also lets the adjudicating officer penalise "any other person". We know of no order that settles whether a foreign parent is a promoter for section 42(9). So treat the parent's exposure as a risk to manage, not a settled rule.

Section 39(5) is narrower. It reaches the company and each "officer who is in default". Under section 2(60)(vi), that includes a director who consented to the contravention. It also covers one who knew of it through board proceedings and did not object.

Section 446B limits the penalty to at most half for a start up recognised by the Department for Promotion of Industry and Internal Trade (DPIIT). The cap is then INR 2,00,000 for the company and INR 1,00,000 for each officer. Small companies and One Person Companies get the same relief. A foreign owned subsidiary is neither, because section 2(85) excludes subsidiary companies from the small company definition.

Can a missed PAS-3 be fixed?

Yes. File PAS-3 now with the additional fee, because section 403 sets no outer time limit for filing with that fee. The penalty then goes to adjudication by the Registrar under section 454. On our reading, compounding under section 441 does not fit, because sections 39(5) and 42(9) now impose a penalty, not a fine.

The second proviso to section 403(1) lets a company file late "on payment of such additional fee as may be prescribed". It sets no cut off. Older guides mention a 270 day limit, after which the company needed condonation. The section as it now reads contains no such limit.

The repair runs in four steps:

1. File the return. Prepare PAS-3 with the original allotment date, and pay the additional fee the system computes.
2. Expect adjudication. Section 454(1) provides for adjudicating officers not below the rank of Registrar. Under section 454(3)(b) the officer can also direct the company to rectify the default.
3. Make your case. Section 454(4) requires a hearing before any penalty. We explain the cause and ask for the penalty to run only to the date of filing.
4. Pay or appeal. An appeal lies to the Regional Director under section 454(5). Section 454(6) allows 60 days from receipt of the order. Failing to comply with the order within 90 days brings the punishments in section 454(8).

In our practice, we do not wait for a notice. We write to the Registrar, disclose the default and ask for adjudication. Before you write, confirm the current procedure under the Companies (Adjudication of Penalties) Rules, 2014 with the ROC that has jurisdiction.

Section 441 allows compounding of offences, except those punishable with imprisonment only or with imprisonment and also fine. Sections 39(5) and 42(9) now provide a penalty, not a fine. On our reading, a late PAS-3 therefore goes to adjudication under section 454, not compounding. Section 460(b) lets the Central Government condone a delay in filing any document. On our reading it is rarely needed for PAS-3, because section 403 already allows late filing.

A defective allotment needs more than a late return.

Problem	Fix	Law
PAS-3 filed late; the allotment itself was valid	File with the additional fee; face adjudication of the penalty	Sections 403, 39(5) or 42(9), 454
Second late PAS-3 within 365 days of the last one	Pay the higher additional fee	Note 1 to the additional fee table, G.S.R. 12(E)
Private placement made without PAS-4, in cash, with renunciation or to more than 200 persons	Penalty up to the amount raised or INR 2,00,00,000, whichever is lower, and refund with interest within 30 days of the order	Section 42(10)
Shares not allotted within 60 days of receipt	Refund within the next 15 days; 12 percent interest after that	Section 42(6); regulation 3, FEMA 395/2019-RB
Money used before PAS-3 was filed	File PAS-3 at once; expect the early use to be treated as a section 42 breach	Proviso to section 42(4); section 42(10)
FC-GPR filed late, within 3 years of the due date	Pay the late submission fee	A.P. (DIR Series) Circular No. 16, 30 Sep 2022
FC-GPR not filed within 3 years	Apply for compounding	Same circular; section 15, FEMA

The FEMA late submission fee is INR 7,500 plus 0.025 percent of the amount for each year of delay. It is capped at 100 percent of the amount and rounded up to the next INR 100. Our guides on FC-GPR compounding with RBI and the FEMA compounding application cover the route after three years.

What changed in 2026

We found no change in 2026, up to 1 Oct 2026, to sections 39 and 42 of the Act. Nor did we find one to rules 12 and 14 of the PAS Rules or to the PAS-3 fees. The changes sit around PAS-3: a pending Companies Act Bill, a new land border test, FEMA reporting and income tax.

Area	Before	Now	Date	Instrument
Companies Act amendments	Companies Act, 2013 as it stands	Corporate Laws (Amendment) Bill, 2026 pending in Parliament; not law on 1 Oct 2026	Introduced in the Lok Sabha 23 Mar 2026 and referred to a Joint Committee	Bill No. 85 of 2026
Land border beneficial owner	Undefined test	Beneficial owner tested against rule 9(3) of the PML (Maintenance of Records) Rules, 2005, or control; relevant to the rule 14(1) bar on PAS-4 offers	1 May 2026	NDI (Amendment) Rules, 2026, S.O. 2174(E), after the Cabinet decision of 10 Mar 2026
FEMA reporting regulations	Last amended 15 Jan 2025	Amended again; FC-GPR stays at 30 days	13 Jun 2026	FEMA 395(4)/2026-RB
Income tax on share premium	Section 56(2)(viib) of the Income Tax Act, 1961, not applied from AY 2025-26	No successor in section 92 of the Income Tax Act, 2025; in our practice, the parent's subscription goes into Form 48, which replaces Form 3CEB	1 Apr 2026	Income Tax Act, 2025; Income Tax Rules, 2026
MCA amnesty	Companies Compliance Facilitation Scheme, 2026 (CCFS-2026) opened 15 Apr 2026	Last extended to 15 Sep 2026; check its form list before assuming it covered a late PAS-3	15 Sep 2026	General Circulars 01/2026, 03/2026 and 04/2026
MCA fees	Fees Rules as amended in 2022	G.S.R. 300(E) changed only DIR-3 KYC fees; PAS-3 fees unchanged	21 Apr 2026	G.S.R. 300(E)

The Corporate Laws (Amendment) Bill, 2026 was introduced in the Lok Sabha on 23 Mar 2026 and referred to a Joint Committee. It was not among the Bills passed when the Monsoon Session ended on 13 Aug 2026. It remains pending on 1 Oct 2026. Until it becomes law and comes into force, the sections on this page apply as they stand.

Worked example

The facts below are illustrative.

• The Indian subsidiary is a private company in an automatic route sector with a 100 percent cap.

• Paid up capital is INR 10,00,000 in 1,00,000 equity shares of INR 10. The Delaware parent holds 99,990 shares and an Indian resident director holds 10 as its nominee.

• Authorised capital is INR 1,00,00,000, so the PAS-3 fee is INR 600.

• The parent adds INR 2,00,00,000 by preferential allotment to itself alone. It has no land border beneficial owner, and both holdings are in demat form.

Case A with the filings on time

The registered valuer and the FEMA valuer each put fair value at INR 246.40 a share. The special resolution sets an issue price of INR 250, at or above both figures.

Item	Amount
Issue price a share (INR)	250
New shares (2,00,00,000 ÷ 250)	80,000
Added to share capital at INR 10 a share (INR)	8,00,000
Added to securities premium at INR 240 a share (INR)	1,92,00,000
Paid up capital after the issue (INR)	18,00,000
Parent's holding after the issue	1,79,990 of 1,80,000 shares (99.994%)
Stamp duty at 0.005% of INR 2,00,00,000 (INR)	1,000
PAS-3 normal fee (INR)	600

Authorised capital covers the new paid up capital, so the company files no SH-7. Both members consent to a general meeting at shorter notice. For a meeting other than the AGM, the proviso to section 101(1) needs consent from a majority in number of members. They must also hold at least 95 percent of the paid up capital that carries votes.

Date	Action	Rule
Thu 1 Oct 2026	Registered valuer's report and FEMA valuation certificate signed; ownership chart checked	Rule 13; Master Direction paras 3.2 and 8.1.1
Mon 5 Oct 2026	Board approves the issue, records the parent in PAS-5 and calls the general meeting	Section 179(3)(c); rule 14(4)
Mon 5 Oct 2026	General meeting at shorter notice passes the special resolution	Sections 42 and 62(1)(c); section 101(1) proviso
Wed 7 Oct 2026	MGT-14 filed (last day would be Wed 4 Nov 2026)	Section 117; rule 14(8)
Thu 8 Oct 2026	PAS-4 sent to the parent	Rule 14(3)
Fri 9 Oct 2026	Parent signs the PAS-4 application, confirms that it needs no government approval, and remits from its own US account	Section 42(4); rule 14(5)
Tue 13 Oct 2026	Money credited to the separate account; the 60 day clock starts	Section 42(6); regulation 3, FEMA 395/2019-RB
Mon 19 Oct 2026	AD bank issues the FIRC and KYC report	Our practice
Wed 21 Oct 2026	Board allots 80,000 shares; corporate action credits the parent's demat account; depository collects INR 1,000	Section 179(3)(c); Indian Stamp Act, 1899 as amended from 1 Jul 2020
Tue 27 Oct 2026	PAS-3 filed; money then moved to the operating account	Section 42(8); proviso to section 42(4)
Thu 5 Nov 2026	Last day for PAS-3 (met on 27 Oct)	Section 42(8)
Fri 20 Nov 2026	Last day for FC-GPR	Regulation 4(1), FEMA 395/2019-RB
Sat 12 Dec 2026	Last day to allot under the 60 day rule (met on 21 Oct)	Section 42(6)
Mon 21 Dec 2026	Last day for demat credit, 2 months from allotment (met on 21 Oct)	Section 56(4)(b)
Tue 5 Oct 2027	Last day to allot under the 12 month window (met)	Rule 13, Share Capital Rules

Case B with PAS-3 filed 25 days late

Now suppose the company files PAS-3 on Mon 30 Nov 2026 instead of by Thu 5 Nov 2026. The subsidiary has three directors and no other late PAS-3 in the past 365 days.

Item	Working	Amount (INR)
Days late	5 Nov to 30 Nov 2026	25 days
Additional fee	2 × INR 600 (delay up to 30 days)	1,200
Penalty on the company	25 × INR 1,000 under section 42(9)	25,000
Penalty on each of three directors	25 × INR 1,000 each	75,000 in total
Penalty on the Delaware parent, if treated as a promoter (our reading, not settled)	25 × INR 1,000	25,000
Maximum exposure	Additional fee plus penalties; 1,01,200 if the parent is not a promoter	1,26,200

Any use of the money before 30 Nov 2026 would also breach the proviso to section 42(4), which opens section 42(10).

Case C with a rights issue PAS-3 missed for a year

A second subsidiary allotted rights shares worth INR 50,00,000 to its UK parent on 10 Jul 2025. Its authorised capital is INR 50,00,000, so the normal PAS-3 fee is INR 500. PAS-3 and FC-GPR both fell due on 9 Aug 2025. A new finance lead finds the gap and files both on 30 Oct 2026.

Item	Working	Amount (INR)
Days late for PAS-3	9 Aug 2025 to 30 Oct 2026	447 days
Additional fee	12 × INR 500 (beyond 180 days)	6,000
Additional fee if this is the second late PAS-3 in 365 days	18 × INR 500	9,000
Penalty on the company	Lesser of 447 × INR 1,000 and INR 1,00,000, under section 39(5)	1,00,000
Penalty on each of two directors in default	Same cap	2,00,000 in total
Same penalties for a DPIIT recognised start up	At most half, under section 446B	Up to 1,50,000 in total
FC-GPR late submission fee, 15 months late	7,500 + (0.025% × 50,00,000 × 1.25) = 9,062.50, rounded up	9,100

In the FC-GPR formula, the delay of 14 months and 21 days rounds up to 15 months, or 1.25 years. Here the PAS-3 penalty on the company alone is more than ten times the FEMA fee.

Common mistakes

1. Using the 30 day clock for a preferential allotment. Section 42(8) gives 15 days. Fix: treat any issue made through a PAS-4 as a 15 day return.
2. Sending PAS-4 before MGT-14 is on file. Rule 14(8) bars it. Fix: file MGT-14 the day after the special resolution and send PAS-4 once the SRN arrives.
3. Taking the money from a group treasury company. Rule 14(5) requires the subscriber's own account. Fix: the named allottee remits from its own account.
4. Landing the money in the operating account. Section 42(6) requires a separate account in a scheduled bank. Fix: open it with the AD bank before PAS-4 goes out.
5. Spending the money before PAS-3. The proviso to section 42(4) bars it. Fix: move the funds only after the PAS-3 filing receipt arrives.
6. Treating the FEMA certificate as the registered valuer's report. Rule 12(7) needs a valuer registered under section 247. Fix: check the signer's registration before the board meeting.
7. Forgetting PAS-3 on conversions and ESOP allotments. Each is an allotment under section 39(4). Fix: diary a PAS-3 reminder for each one.
8. Mismatched figures across PAS-3 and FC-GPR. A different allotment date or allottee name triggers AD bank queries. Fix: prepare both forms from one allotment sheet.
9. Filing a second late PAS-3 within a year. It moves into the higher additional fee column. Fix: set an internal deadline of 10 days after every allotment.
10. Missing a land border link at parent level. The 2026 NDI test looks through the parent to its beneficial owners. Fix: trace the parent's ownership chart before every PAS-4.

PAS-3 checklist

1. Identify the route and diary the PAS-3 deadline of 30 or 15 days from allotment.
2. Confirm the entry route and sectoral cap, and trace the parent's owners for any land border link.
3. Obtain the registered valuer's report and the FEMA valuation certificate where the route needs them.
4. Check authorised capital, and raise it with SH-7 if the allotment would exceed it.
5. Pass the board and members' resolutions the route requires, and file MGT-14 for any special resolution.
6. Record the allottee in PAS-5 and send the PAS-4 within 30 days, for a private placement.
7. Open a separate bank account with the AD bank for private placement money.
8. Receive the money from the allottee's own account, and collect the FIRC and KYC report.
9. Allot the securities at a board meeting within 60 days of receipt.
10. Credit the demat account and let the depository collect stamp duty at 0.005 percent.
11. Prepare the list of allottees with the name and address exactly as on the FIRC.
12. File PAS-3 with the attachments, fee and professional certificate.
13. File FC-GPR on FIRMS within 30 days of allotment, using the same figures.
14. Release private placement money only after PAS-3 is on file, and carry the allotment into MGT-7, the FLA return and Form 48.

To have us file PAS-3 and FC-GPR together for your subsidiary, start from our FEMA compliance service.

Frequently Asked Questions

Is PAS-3 needed when a foreign parent is the only subscriber in a rights issue?+

Yes. Section 39(4) of the Companies Act, 2013 applies to every allotment, whatever the number of allottees. Rule 12 gives 30 days from allotment for a rights issue. The company also files FC-GPR within 30 days under regulation 4(1) of FEMA 395/2019-RB, because the parent is a person resident outside India.

Does a rights issue PAS-3 need a valuation report?+

Not under the Companies Act. Rule 12(7) asks for a registered valuer's report only for a section 62(1)(c) issue by an unlisted company. FEMA is different. Renounced or unsubscribed rights shares taken by the parent must meet fair value under the Master Direction on Foreign Investment. We obtain a FEMA certificate for every issue anyway.

Can the company use private placement money before filing PAS-3?+

No. The proviso to section 42(4) of the Companies Act, 2013 bars a company from using money raised through private placement until it allots and files the return under section 42(8). The money stays in the separate bank account that section 42(6) requires. A rights issue carries no such bar, but its PAS-3 is still due within 30 days.

Can the foreign parent itself be penalised for a late PAS-3?+

On a private placement, possibly. Section 42(9) puts the penalty on the company, its promoters and its directors. Section 2(69)(b) treats a person with control, including control as a shareholder, as a promoter. On our reading, a controlling foreign parent may fall within that, but no order we know of settles it. On a rights issue, section 39(5) reaches only the company and its officers in default.

What if the money arrives but the shares are not allotted within 60 days?+

Section 42(6) of the Companies Act, 2013 requires repayment within the next 15 days, and then interest at 12 percent a year from the 60th day. Regulation 3 of FEMA 395/2019-RB sets the same 60 and 15 day limits for foreign money. Refunded money needs no PAS-3.

Does a land border shareholder in the parent's chain change PAS-3?+

It changes the steps before PAS-3. Rule 14(1) of the PAS Rules bars a private placement offer to a body corporate or national of a land border country without government approval under the NDI Rules, attached to the PAS-4. Since the NDI (Amendment) Rules, 2026 of 1 May 2026, beneficial ownership follows rule 9(3) of the PML Rules or control. Non controlling stakes of up to 10 percent stay on the automatic route.

What is the higher additional fee on PAS-3?+

It is a larger late fee under the Companies (Registration Offices and Fees) Rules, 2014, as amended by G.S.R. 12(E) from 1 Jul 2022. It applies when a company files PAS-3 or INC-22 late on two or more occasions within 365 days. The multiple rises from 2 to 3 times the normal fee for a short delay, and from 12 to 18 times beyond 180 days.

Can the Registrar waive the PAS-3 penalty?+

Sections 39(5) and 42(9) of the Companies Act, 2013 fix the penalty per day, and the Registrar adjudicates it under section 454. The company gets a hearing under section 454(4) and can appeal to the Regional Director within 60 days. Section 446B caps the penalty at half for a DPIIT recognised start up. Plan for adjudication, not a waiver.

Is PAS-3 filed when CCPS convert into equity shares?+

Yes. Conversion allots new equity shares, and section 39(4) covers every allotment of securities. On our reading, the 30 day limit in rule 12 applies, because the conversion follows the terms of the original issue. Under paragraph 4.7 of the Master Direction on Foreign Investment, the conversion price comes from the formula fixed when the CCPS were issued.

Do ESOP allotments to employees abroad need PAS-3?+

Yes. When an employee exercises options, the company allots shares under section 62(1)(b), and rule 12 gives 30 days for PAS-3. The FEMA side starts earlier. Regulation 4(4) of FEMA 395/2019-RB requires Form ESOP within 30 days of issuing options to non resident employees or directors, including those of a holding company. The allotment on exercise then goes into FC-GPR.

How is the PAS-3 fee worked out?+

The fee follows nominal share capital under the Companies (Registration Offices and Fees) Rules, 2014. It is INR 200 below INR 1,00,000, INR 300 below INR 5,00,000, INR 400 below INR 25,00,000, INR 500 below INR 1,00,00,000 and INR 600 from INR 1,00,00,000. The allotment size does not change the fee.

Does the Corporate Laws (Amendment) Bill, 2026 affect PAS-3 today?+

No. Bill No. 85 of 2026 was introduced in the Lok Sabha on 23 Mar 2026 and referred to a Joint Committee. It was not passed when the Monsoon Session ended on 13 Aug 2026, and it is still pending on 1 Oct 2026. Until it becomes law and comes into force, section 39(4), rule 12 and section 42(8) set the PAS-3 deadlines.

What stamp duty applies when shares are allotted to a foreign parent?+

Stamp duty on an issue of shares is 0.005 percent of the consideration under Schedule I of the Indian Stamp Act, 1899, as amended from 1 Jul 2020. For shares issued in demat form the depository collects it. On an issue of INR 2,00,00,000 the duty is INR 1,000. PAS-3 itself carries no stamp duty.

Is a late PAS-3 also a FEMA contravention?+

No. A late PAS-3 leads to additional fees and a Companies Act penalty under section 39(5) or 42(9). FEMA looks at FC-GPR, due within 30 days under regulation 4(1) of FEMA 395/2019-RB. A late FC-GPR draws the late submission fee under A.P. (DIR Series) Circular No. 16 of 30 Sep 2022, and compounding after three years.

Can a PAS-3 missed in an earlier year still be filed?+

Yes. The second proviso to section 403(1) of the Companies Act, 2013 lets a company file any document after its due date on payment of the additional fee, with no outer time limit. Beyond 180 days the fee is 12 times the normal fee, or 18 times on a repeat delay. The penalty under section 39(5) or 42(9) is then adjudicated under section 454.

Sources

• Income Tax Department (host of the Companies Act, 2013 text), Section 39, Allotment of securities by company, https://www.incometaxindia.gov.in/w/section-39-121
• Income Tax Department, Companies Act, 2013, Section 42, Issue of shares on private placement basis, https://www.incometaxindia.gov.in/w/section-42-118
• Income Tax Department, Companies Act, 2013, Section 62, Further issue of share capital, https://www.incometaxindia.gov.in/w/section-62-101
• Income Tax Department, Companies Act, 2013, Section 2, Definitions (clauses 8, 60, 69 and 85), https://www.incometaxindia.gov.in/w/section-2-148
• Income Tax Department, Companies Act, 2013, Section 56, Transfer and transmission of securities (section 56(4)), https://www.incometaxindia.gov.in/w/section-56-108
• Income Tax Department, Companies Act, 2013, Section 101, Notice of meeting, https://www.incometaxindia.gov.in/w/section-101-43
• Income Tax Department, Companies Act, 2013, Section 403, Fee for filing, https://www.incometaxindia.gov.in/w/section-403-2
• Income Tax Department, Companies Act, 2013, Section 441, Compounding of certain offences, https://www.incometaxindia.gov.in/w/section-441-2
• Income Tax Department, Companies Act, 2013, Section 446B, Lesser penalties for certain companies, https://www.incometaxindia.gov.in/w/section-446b
• Income Tax Department, Companies Act, 2013, Section 454, Adjudication of penalties, https://www.incometaxindia.gov.in/w/section-454-2
• Income Tax Department, Companies Act, 2013, Section 460, Condonation of delay in certain cases, https://www.incometaxindia.gov.in/w/section-460-2
• Income Tax Department, General Clauses Act, 1897, Section 9, Commencement and termination of time, https://www.incometaxindia.gov.in/w/section-9-171
• Ministry of Corporate Affairs, Companies (Prospectus and Allotment of Securities) Rules, 2014 (rules 9B, 12 and 14), Companies (Share Capital and Debentures) Rules, 2014 (rules 12 and 13) and Companies (Registration Offices and Fees) Rules, 2014, Rules library, https://www.mca.gov.in/content/mca/global/en/acts-rules/ebooks/rules.html
• Ministry of Corporate Affairs, Companies (Registration Offices and Fees) Amendment Rules, 2022, G.S.R. 12(E), 11 Jan 2022, in force 1 Jul 2022; Companies (Prospectus and Allotment of Securities) Amendment Rules, 2022, G.S.R. 338(E), 5 May 2022; Companies (Prospectus and Allotment of Securities) Amendment Rules, 2023, G.S.R. 37(E), 20 Jan 2023, in force 23 Jan 2023 (rule 12(6) omitted; Forms PAS-2, PAS-3 and PAS-6 substituted); G.S.R. 300(E), 21 Apr 2026, Notifications library, https://www.mca.gov.in/content/mca/global/en/acts-rules/ebooks/notifications.html
• Ministry of Corporate Affairs, Exemptions to private companies, G.S.R. 464(E), 5 Jun 2015, https://www.mca.gov.in/Ministry/pdf/Exemptions_to_private_companies_05062015.pdf
• Ministry of Corporate Affairs, General Circulars 01/2026 (24 Feb 2026), 03/2026 (8 Jul 2026) and 04/2026 (31 Aug 2026) on CCFS-2026, https://www.mca.gov.in/content/mca/global/en/acts-rules/ebooks/notifications.html
• Reserve Bank of India, Foreign Exchange Management (Mode of Payment and Reporting of Non Debt Instruments) Regulations, 2019, FEMA 395/2019-RB, as amended to 13 Jun 2026 (regulations 3 and 4), https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11723&Mode=0
• Reserve Bank of India, Master Direction on Foreign Investment in India, updated as on 15 Jun 2026 (paras 3.2, 4.6, 4.7 and 8.1.1), https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=11200
• Reserve Bank of India, Master Direction on Reporting under FEMA, updated 23 Sep 2026, https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=10202
• Reserve Bank of India, Late Submission Fee for reporting delays under FEMA, A.P. (DIR Series) Circular No. 16, 30 Sep 2022, https://rbi.org.in/Scripts/NotificationUser.aspx?Id=12393&Mode=0
• Reserve Bank of India, Foreign Exchange Management (Non Debt Instruments) Rules, 2019, updated up to 2 Sep 2026 (rules 6(a) with Explanation 2, and 7), https://www.rbi.org.in/scripts/bs_viewcontent.aspx?Id=5083
• Reserve Bank of India, User manual for SMF, FIRMS application, 1 Sep 2018 (Form FC-GPR: nature of issue, date of issue and attachments), https://www.rbi.org.in/scripts/femaview.aspx?femaid=65
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• Press Information Bureau, Monsoon Session of Parliament adjourns sine die, 13 Aug 2026, https://www.pib.gov.in/PressReleasePage.aspx?PRID=2298901
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• Income Tax Department, Section 92 of the Income Tax Act, 2025, https://www.incometaxindia.gov.in/w/section-92-109