Return of Allotment filed with ROC within 30 days of allotment. Subscription money cannot be used before PAS-3 filing for private placement.

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Issue of Shares in Delhi: Rights, Preferential, Bonus, ESOP, and Allotment Compliance

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Rights Issue: S.62(1)(a) | Offer to existing shareholders | Board Resolution | No valuation needed

Preferential: S.62(1)(c) | Special Resolution | Valuation by registered valuer | Max 200 persons/year

PAS-3: Return of Allotment filed with ROC within 30 days | Share certificates within 60 days

Angel Tax Removed: S.56(2)(viib) removed from 1 April 2025 - no tax on premium for private companies

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Overview Share Issuance When Needed Services Preferential Angel Tax Rights Issue Fees Forms Why Patron Comparison FAQs

Issue of Shares for Delhi Companies

📌 TL;DR - Issue of Shares in Delhi Services at a Glance

Five methods: (1) Rights Issue S.62(1)(a) - existing shareholders, Board Resolution, no valuation. (2) Preferential S.62(1)(c) - specific investors, Special Resolution, registered valuer, max 200/year, allot within 60 days. (3) Bonus S.63 - free shares from reserves. (4) ESOP S.62(1)(b) - employee stock options. (5) Debt Conversion S.62(3). PAS-3 within 30 days. Foreign: FC-GPR within 30 days. Angel tax (S.56(2)(viib)) REMOVED from 1 Apr 2025. Patron manages from Delhi.

Delhi's startup ecosystem drives constant share issuance: angel rounds, VC/PE funding, ESOPs, bonus issues, rights issues. Post-removal of angel tax, premium share issuance is tax-free. ROC South/Central Delhi (post-Feb 2026) processes PAS-3. Learn more about Issue of Shares across India.

Patron Accounting's Delhi office handles all types: rights issue, preferential with valuation, PAS-3, ESOP design, bonus compliance, FC-GPR for foreign allotments. Integrated with authorised capital increase and FDI compliance.

Content is reviewed quarterly for accuracy.

Further Issue of Share Capital Under Section 62

Issue of shares = creation and allotment of new equity shares after incorporation under S.62. Private companies use private placement, rights issue, or preferential allotment (no public invitation). Increases paid-up capital within authorised capital limit.

Pre-requisites: (1) sufficient authorised capital (else SH-7 first), (2) AOA authorises the issue type, (3) correct resolution (Board for rights, Special for preferential/ESOP), (4) valuation for preferential, (5) FEMA compliance if non-resident (FC-GPR 30 days), (6) PAS-3 within 30 days.

Angel tax (S.56(2)(viib)) REMOVED from 1 April 2025. No income tax on share premium for private companies. FEMA pricing still applies for foreign investors.

Key Terms for Issue of Shares in Delhi:

Rights Issue: S.62(1)(a). All shareholders proportionally. Board Resolution. No valuation. Simplest.

Preferential: S.62(1)(c). Specific persons. Special Resolution. Registered valuer. Max 200/year. 60-day allotment.

PAS-3: Return of Allotment. ROC within 30 days. Money can't be used before PAS-3 (private placement).

Angel Tax Removed: S.56(2)(viib) gone from 1 Apr 2025. Premium tax-free. FEMA FMV still applies for foreign investors.

Section 62 Share Issue

When Delhi Companies Issue Shares

Fundraising (VC/PE/Angel): Preferential allotment at premium. SR + valuation + PAS-4 + PAS-3 + FC-GPR if foreign.
Existing Shareholder Investment: Rights issue proportionally. Board Resolution. No valuation. Simplest.
Employee Retention (ESOP): Stock options to key employees. SR + ESOP scheme + compensation committee.
Capitalising Reserves (Bonus): Free shares from profits/reserves. No cash inflow. Pre-IPO.
Debt-to-Equity (S.62(3)): Convert director/investor loans. Prior shareholder approval at borrowing time.
Co-Founder Addition: Shares to new co-founders post-incorporation. Preferential with valuation.

Share Issuance Services: What Patron Handles

Service	What We Do
Authorised Capital Check + Increase	Verify sufficient capital. If approaching limit: SH-7 filing to increase before allotment.
Valuation Coordination	Registered valuer for preferential. DCF/NAV/comparable. FEMA-compliant for foreign investors. Certificate dated close to allotment.
Resolution Drafting + EGM	Board Resolution (rights/bonus). Special Resolution with S.102 disclosures (preferential/ESOP). EGM notice, MGT-14 within 30 days.
PAS-4 + PAS-5	Private Placement Offer Letter with all disclosures. Record of private placement. Dispatch to identified allottees only (max 200/year).
Share Allotment + PAS-3	Allotment board meeting (within 60 days). Share certificates (60 days). PAS-3 with ROC (30 days). Register of Members updated.
FC-GPR (Foreign Allotments)	RBI FIRMS portal within 30 days. FEMA pricing. FIRC, KYC, valuation, CS certificate. Integrated with FDI compliance.
ESOP Scheme Design	Pool size, vesting (1-year min), exercise price/window, compensation committee, Special Resolution, annual disclosure.

Our Process

Preferential Allotment: Step-by-Step for Delhi Companies

Most common for VC/PE fundraising. 30-60 days. Special Resolution + valuation + PAS-3 + FC-GPR if foreign. Must complete within 12 months of SR.

Step 1

Pre-Issue Verification

Authorised capital sufficient (else SH-7). AOA authorises preferential. ACTIVE COMPLIANT on MCA. Foreign investor: sector/route/land-border verified. Patron checks all prerequisites.

Capital verifiedRoute confirmed

Verified01

Step 2

Obtain Valuation Report

Registered valuer determines FMV. DCF, NAV, or comparable. Dated close to allotment. Foreign investors: also FEMA pricing compliance. Patron coordinates.

FMV certifiedFEMA compliant

Valued02

Step 3

Board Meeting + EGM

Board: approve issue, consider valuation, finalise allottees (max 200/year), approve PAS-4, fix EGM. EGM: Special Resolution (75%) with S.102 + Rule 13 disclosures.

SR 75% passedFull disclosures

Resolved03

Step 4

MGT-14 + Dispatch PAS-4

MGT-14 within 30 days of SR. PAS-4 offer letter dispatched to identified allottees within 30 days. Application money in separate bank account. Cannot use before PAS-3.

MGT-14 filedPAS-4 dispatched

Dispatched04

Step 5

Allot Shares + PAS-3

Board meeting: allot within 60 days of money receipt. Share certificates within 60 days. PAS-3 with ROC within 30 days. Register of Members updated. Patron files within 7 days.

AllottedPAS-3 filed

Completed05

Step 6

FC-GPR (Foreign Investors)

If foreign investor: FC-GPR on RBI FIRMS within 30 days. FIRC, KYC, valuation, CS certificate. FEMA pricing at or above FMV. Patron handles both PAS-3 and FC-GPR simultaneously.

FC-GPR filedFEMA compliant

Complete06

Angel Tax Removal + Rights Issue (Simplified)

Angel Tax REMOVED (1 Apr 2025): S.56(2)(viib) gone. No income tax on share premium for private companies. Major relief for Delhi startups. FEMA FMV still applies for foreign investors.
Rights Issue (Simplest): Board Meeting → Letter of Offer to all shareholders (3 days before opening) → 15-30 day acceptance → Receive money → Allot → PAS-3. No Special Resolution. No valuation. No MGT-14.
Bonus Issue: Board + Ordinary Resolution. Free shares from reserves. No cash inflow. Capitalise reserves. S.63 conditions.
ESOP: Special Resolution + scheme + 1-year min vesting + compensation committee. For Delhi startups attracting talent.

Common Share Issuance Challenges

Challenge	Impact	How Patron Accounting Solves It
Authorised Capital Insufficient	Paid-up exceeds authorised after proposed allotment. Must increase first via SH-7 (7-15 days).	Patron checks before every issuance. SH-7 handled if needed.
Valuation Non-Compliance	Preferential without registered valuer. FEMA: below FMV to foreign = contravention.	Registered valuer coordinated. FEMA pricing ensured.
PAS-3 Deadline Missed	30-day deadline. Money can't be used before filing (private placement). Penalty + refund risk.	Patron files PAS-3 within 7 days of allotment.
60-Day Allotment Breach	Money received but shares not allotted within 60 days = refund with 12% interest.	Patron ensures allotment within timeline.
FC-GPR Missed	Foreign investor allotment without FC-GPR within 30 days = LSF blocks future raises.	Patron files FC-GPR within 7 days for foreign allotments.

Share Issuance Fees in Delhi

Fee Component	Amount
Rights Issue (Complete)	From INR 4,999 + Govt Fees
Preferential Allotment (Complete)	From INR 9,999 + Govt Fees
Valuation Report (Registered Valuer)	From INR 9,999
ESOP Scheme Design + Compliance	From INR 14,999
Bonus Issue Compliance	From INR 4,999
FC-GPR (Foreign Allotment)	From INR 9,999 additional
Patron Accounting Professional Fees	Starting from INR 3,499 (Exl GST and Govt. Charges)

All fees and charges listed are indicative only and do not constitute a binding offer. Final amounts may vary depending on the volume of work and the complexity involved.

Professional service charges for drafting, filing, and representation are separate from the statutory fees. The exact fee depends on the complexity of the case, disputed amount, and number of hearings required. Contact us for a detailed quote.

Get a free Issue of Shares in Delhi consultation - Call +91 945 945 6700 or WhatsApp us. No-obligation assessment.

Forms and Deadlines for Share Issuance

Stage	Estimated Timeline
PAS-3 (Return of Allotment)	Within 30 days of allotment. Share allotment details to ROC.
PAS-4 (Offer Letter)	Dispatch within 30 days of EGM. Private placement only.
MGT-14 (Special Resolution)	Within 30 days of SR. For preferential and ESOP.
SH-7 (Authorised Capital)	Within 30 days of OR. If capital increase needed.
FC-GPR (Foreign Investor)	Within 30 days of allotment on RBI FIRMS.
Share Certificates	Within 60 days of allotment. Physical or demat.
Register of Members	Immediately on allotment. Updated with new shareholders.

Critical: Subscription money in private placement CANNOT be utilised before PAS-3 filing. Allotment must be within 60 days of receiving money (else refund + 12% interest). Complete preferential allotment within 12 months of Special Resolution. Multiple concurrent deadlines require precise tracking.

Key Benefits

Why Choose Patron for Share Issuance in Delhi

End-to-End Fundraising

Authorised capital increase to valuation to Special Resolution to PAS-3 to FC-GPR. Single engagement. No compliance gaps.

Valuation Coordination

Registered valuer. Companies Act Rule 13 + FEMA pricing compliant. No dual compliance gaps for foreign investors.

FEMA + Companies Act

PAS-3 (ROC) and FC-GPR (RBI) filed simultaneously for foreign investor allotments. Both frameworks covered.

Timeline Management

Multiple concurrent deadlines: 60-day allotment, 30-day PAS-3, 30-day FC-GPR, 30-day MGT-14, 12-month completion. All tracked.

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"Delhi edtech raising Rs 5 crore from 3 angels + 1 Singapore VC. Patron: SH-7 (10 days), DCF valuation, EGM with SR, allotted, PAS-3 and FC-GPR within 7 days each. Complete round in 35 days." - Edtech Founder, Delhi

4-Office Signal: Pune, Mumbai, Delhi, and Gurugram.

Patron vs Self-Filing: Share Issuance Comparison

Factor	Patron Accounting	Self-Filing
Pre-Issue Check	Authorised capital + AOA + compliance verified	Often miss authorised capital limit
Valuation	Registered valuer, FEMA-compliant	Self-assessed (non-compliant)
Resolutions	Section-cited, disclosure-complete	Generic templates, missing disclosures
PAS-3	Filed within 7 days	30-day deadline often missed
FC-GPR	Filed within 7 days for foreign	30-day missed, LSF triggered
Pricing	From INR 3,499	Rs 0 + compliance risk + penalty

Related Corporate Services

Issue of Shares (India) - National-level service.
Authorised Capital Change - SH-7 before allotment.
FDI Compliance - FC-GPR for foreign investors.
Pvt Ltd Registration - Company incorporation.
Startup Registration - DPIIT recognition.

Legal Framework: Issue of Shares

S.62(1)(a): Rights issue. Board Resolution. No valuation.

S.62(1)(c) + S.42: Preferential. Special Resolution. Registered valuer. Max 200/year. PAS-4.

S.63: Bonus issue. Board + OR. Capitalise reserves.

S.56(2)(viib): REMOVED 1 Apr 2025. No angel tax on premium.

PAS-3: Within 30 days of allotment. Money can't be used before filing.

FC-GPR: Within 30 days for foreign investors on FIRMS. FMV pricing.

Source: mca.gov.in, Companies Act 2013

FAQs: Issue of Shares in Delhi

Common questions about rights issue, preferential allotment, PAS-3, valuation, and angel tax for Delhi companies.

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Rights vs preferential?

Rights: ALL shareholders proportionally. Board Resolution. No valuation. Preferential: specific persons. Special Resolution. Registered valuer. Max 200/year. 60-day allotment.

Is valuation mandatory?

Only for preferential/private placement. Not rights or bonus. But FEMA FMV always required for foreign investors regardless of type. Patron coordinates when needed.

Has angel tax been removed?

Yes. S.56(2)(viib) removed 1 Apr 2025. No income tax on premium for private companies. FEMA pricing still applies for foreign investors. Major relief for Delhi startups.

What is PAS-3?

Return of Allotment with ROC within 30 days. Private placement money cannot be used before PAS-3. Patron files within 7 days.

What if authorised capital insufficient?

Increase via SH-7 first (7-15 days). Ordinary Resolution + stamp duty. Patron checks before every issuance and handles SH-7 if needed.

FC-GPR for foreign investors?

Within 30 days of allotment on RBI FIRMS. FIRC + KYC + valuation + CS certificate. Shares at or above FMV. Patron handles PAS-3 + FC-GPR simultaneously.

Penalties for non-compliance?

S.42(10): refund subscription + 12% interest. S.450: Rs 10,000 + Rs 1,000/day. Late PAS-3: additional fees. Late FC-GPR: LSF from RBI.

How much does it cost?

Patron: rights from Rs 4,999. Preferential from Rs 9,999. Valuation from Rs 9,999. ESOP from Rs 14,999. FC-GPR from Rs 9,999 additional. Call +91 945 945 6700.

Quick Answers

Shares kaise issue karein? Rights (existing shareholders) ya preferential (naye investors). Pehle authorised capital check. Valuation (preferential). SR pass karo. Allot karo. PAS-3 30 din mein.

Angel tax hataya? Haan. 1 Apr 2025 se premium par tax nahi. FEMA valuation foreign investors ke liye zaroori hai.

Foreign investor ko shares? PAS-3 (ROC 30 din) + FC-GPR (RBI FIRMS 30 din). Dono zaroori. Patron dono handle karta hai.

Multiple Concurrent Deadlines - Don't Miss Any

Allotment within 60 days of money. PAS-3 within 30 days. FC-GPR within 30 days. MGT-14 within 30 days. Money can't be used before PAS-3. Missing any = refund + 12% interest + penalties + LSF. Start compliance alongside term sheet negotiations.

Contact Patron - Call +91 945 945 6700 or WhatsApp us.

Issue Shares for Your Delhi Company Today

Share issuance requires structured compliance under Sections 62, 42, 63. Post angel tax removal, fundraising is simpler - but valuation, Special Resolution, PAS-3, and FC-GPR remain mandatory and deadline-intensive.

Patron Accounting manages complete share issuance from our Rohini office - authorised capital, valuation, resolution drafting, PAS-3, FC-GPR, ESOP design. 15+ years, 10,000+ businesses, Pune, Mumbai, Delhi, Gurugram.

Reviewed by CA & CS Team - Patron Accounting LLP

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Content Created: 06 April 2026 | Last Updated: 06 April 2026 | Next Review: 06 April 2027 | Reviewed By: CA & CS Team, Patron Accounting LLP

This page is reviewed every 6 months to ensure Companies Act provisions, private placement rules, angel tax status, FEMA pricing guidelines, and PAS-3 procedures are current. Verified against mca.gov.in.