# Return of Allotment under Private Placement

Section 42(8) read with Rule 14(6) of the Companies (Prospectus and Allotment of Securities) Rules, 2014 requires filing of a return of allotment.

## 1. Form and Timing

Form: PAS-3
Filed with: Registrar of Companies (ROC)
Time limit: Within 15 days from the date of allotment
Fee: As prescribed under the Companies (Registration Offices and Fees) Rules, 2014

## 2. Particulars to Accompany PAS-3

The return must contain a complete list of all allottees stating:

Particular	Details
(a) Identity of allottee	Full name, address, PAN, and email ID
(b) Class of security	Whether equity, preference, debenture etc.
(c) Date of allotment	The actual date on which the Board allotted
(d) Quantum & consideration	Number of securities held, nominal value, amount paid; if issued for non-cash consideration — particulars of consideration received

## 3. Penalty for Default [Section 42(9)]

If the return of allotment is not filed within 15 days, the following persons are liable:

The company
Its promoters
Its directors

Quantum of penalty:

₹1,000 per day of continuing default
Maximum cap: ₹25 lakh

This is a continuing default penalty — it accrues daily until the return is finally filed (or until the cap is reached).

## 4. Why This Matters

No utilisation of subscription money is permitted until the return of allotment is filed. So a delay in PAS-3 not only triggers daily penalty but also freezes the funds in the separate bank account.

Worked example

### Example 1

Example — Calculating the Penalty:

M Ltd allotted shares on a private placement basis on 1 April 2026 but failed to file PAS-3 until 1 August 2026 (122 days late).

Penalty computation:

Days in default: 122 − 15 (grace period) = 107 days late from the due date (16 April 2026 to 1 August 2026 = 107 days)
Penalty: 107 × ₹1,000 = ₹1,07,000
This is well within the ₹25 lakh cap, so the full amount is leviable on the company, its promoters AND directors.

⚠️ Common exam mistakes

Students often forget that the return of allotment for private placement is filed within 15 days in form PAS-3, whereas for public issues under Section 39 it is filed within 30 days.
Missing that the penalty applies separately to the company, its promoters, AND its directors — not just the company.
Treating the ₹25 lakh maximum as a per-person cap. It is a per-default cap under Section 42(9).

Bare-Act text Section 42(8) & (9) read with Rule 14(6) · Companies Act, 2013 and Companies (Prospectus and Allotment of Securities) Rules, 2014 · click to expand

Section 42(8): A company making any allotment of securities under this section, shall file with the Registrar a return of allotment within such time as may be prescribed, including the complete list of all allottees, with their full names, addresses, number of securities allotted and such other relevant information as may be prescribed. Section 42(9): If a company defaults in filing the return of allotment within the period prescribed under sub-section (8), the company, its promoters and directors shall be liable to a penalty for each default of one thousand rupees for each day during which such default continues but not exceeding twenty-five lakh rupees.

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Return of Allotment in Private Placement (PAS-3) and Default Penalty

Worked example

⚠️ Common exam mistakes