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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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Rs 5 Cr from 3 angels + Singapore VC. SH-7, DCF valuation, EGM SR, allotted, PAS-3 + FC-GPR within 7 days each. 35 days total.
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Rights issue to 4 existing shareholders. Board Resolution only. No valuation. PAS-3 in 5 days. Simplest fundraising ever.
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ESOP for 15 key employees. Patron designed scheme: 4-year vesting, exercise price, compensation committee. SR filed. Talent retained.
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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.

APL-05 Issue of Shares in Delhi
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

ServiceWhat We Do
Authorised Capital Check + IncreaseVerify sufficient capital. If approaching limit: SH-7 filing to increase before allotment.
Valuation CoordinationRegistered valuer for preferential. DCF/NAV/comparable. FEMA-compliant for foreign investors. Certificate dated close to allotment.
Resolution Drafting + EGMBoard Resolution (rights/bonus). Special Resolution with S.102 disclosures (preferential/ESOP). EGM notice, MGT-14 within 30 days.
PAS-4 + PAS-5Private Placement Offer Letter with all disclosures. Record of private placement. Dispatch to identified allottees only (max 200/year).
Share Allotment + PAS-3Allotment 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 DesignPool 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
FMVValued
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
EGMSR Passed
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
PAS-3Filed
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

ChallengeImpactHow Patron Accounting Solves It
Authorised Capital InsufficientPaid-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-CompliancePreferential without registered valuer. FEMA: below FMV to foreign = contravention.Registered valuer coordinated. FEMA pricing ensured.
PAS-3 Deadline Missed30-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 BreachMoney received but shares not allotted within 60 days = refund with 12% interest.Patron ensures allotment within timeline.
FC-GPR MissedForeign 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 ComponentAmount
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 + ComplianceFrom INR 14,999
Bonus Issue ComplianceFrom INR 4,999
FC-GPR (Foreign Allotment)From INR 9,999 additional
Patron Accounting Professional FeesStarting 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

StageEstimated 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 CertificatesWithin 60 days of allotment. Physical or demat.
Register of MembersImmediately 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

FactorPatron AccountingSelf-Filing
Pre-Issue CheckAuthorised capital + AOA + compliance verifiedOften miss authorised capital limit
ValuationRegistered valuer, FEMA-compliantSelf-assessed (non-compliant)
ResolutionsSection-cited, disclosure-completeGeneric templates, missing disclosures
PAS-3Filed within 7 days30-day deadline often missed
FC-GPRFiled within 7 days for foreign30-day missed, LSF triggered
PricingFrom INR 3,499Rs 0 + compliance risk + penalty

Related Corporate Services

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.

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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Professional share issuance and allotment compliance in Pune, Mumbai, Delhi, and Gurugram.

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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.

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