## Section 39 — Allotment of Securities by Company
### Basic rule
Where a company offers shares to the public through a prospectus, no allotment of any securities shall be made unless:
1. Minimum subscription stated in the prospectus has been received, AND
2. The sums payable on application for the amount stated have been paid to and received by the company through cheque or other instrument.
### Application Money
- Application money shall not be less than 5% of the nominal value of security (or such other percentage as SEBI may specify).
### What if minimum subscription is not received?
- If the stated minimum subscription has not been received within 30 days from the date of issue of the prospectus (or such other period as SEBI may specify), then:
- The application money received must be refunded within such time and manner as prescribed.
- If money not repaid within the stipulated time, directors who are officers in default are jointly and severally liable to repay with interest @ 15% p.a.
### Return of Allotment (Form PAS-3)
The company shall file with ROC a return of allotment within 30 days of allotment, containing:
#### List of allottees
- Details such as name, address, occupation, number of shares allotted, etc.
#### Attachments to PAS-3
1. Allotment for consideration other than cash (NOT bonus shares):
- Attach the contract duly stamped containing complete particulars of shares allotted, valuation report, basis of consideration.
2. Bonus shares:
- Attach resolution passed at the General Meeting authorising the issue, plus allotment report.
3. Issue under Section 62(1) (rights issue):
- Attach allotment report.
### Default — penalty
Company and officer in default: penalty of ₹1,000 per day of default, up to a maximum of ₹1 lakh.
### Timeline summary
- 40 days — from issue of prospectus (Section 26) to ROC filing.
- Public money must be received within 30 days for minimum subscription.
- Allotment return (PAS-3) within 30 days of allotment.