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Allotment of Shares

Get complete support for Allotment of Shares in your Private Limited Company with S.K. & Associates. Online process, save 30% cost — right issue, bonus issue, private placement, and preferential allotment handled end-to-end.

E-forms preparation & filing
Documentation — notice, resolution, letter of offer
Stamp duty papers & charges
ROC fees included
Filing with Ministry of Corporate Affairs
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Allotment of Shares in India
Overview

Allotment of Shares: Complete Guide (2026)

Allotment of Shares is the process by which a company issues new shares to shareholders or investors. It's one of the most common corporate actions for a Private Limited Company — used both for raising capital and for restructuring shareholding.

A Private Limited Company may give its shares by means of the right issue, bonus issue, private placement, or preferential share allotment. The right issue or bonus issue is employed just in case of a share issue to the prevailing shareholders, whereas private placement or preferential share allotment is utilized to supply securities to a particular cluster of people.

Allotment of shares is a compliance-heavy process. It requires Board approval, shareholder consent (where applicable), valuation reports (for preferential allotment), proper documentation, and filing of returns with the ROC. S.K. & Associates handles the entire process — end to end.

Definition

What is Allotment of Shares?

Allotment of shares is the process by which a company issues new shares to shareholders or investors. Allotment is the formal act of issuing shares — either to existing shareholders (rights issue), to all shareholders proportionally from company reserves (bonus issue), or to select investors (private placement or preferential allotment).

For a Private Limited Company, the allotment must be done in compliance with the Companies Act, 2013 — including Board Resolution, shareholder approval (where required), proper valuation (for preferential allotment), and filing of PAS-3 with the ROC within 30 days of allotment.

The issue of shares on a preferential basis requires a Special Resolution, a registered valuer's report, and additional compliance under Section 62(1)(c) of the Companies Act, 2013.

Types

Types of Share Allotment

A Private Limited Company may issue shares through different methods, depending on who the shares are being issued to and why.

Right Issue

Shares issued to existing shareholders in proportion to their current holding — giving them a first right to subscribe to new shares.

Bonus Issue

Shares issued to existing shareholders free of cost, from the company's reserves or profits — no cash inflow, but rewards shareholders.

Private Placement

Securities offered to a select group of investors — a faster alternative to a public issue. Requires Board approval and Special Resolution.

Preferential Allotment

Allotment of shares to a specific group of persons — promoters, investors, or strategic partners — on preferential terms. Requires registered valuer's report.

Step-by-Step

Procedure for Allotment of Shares

Five steps — from form to final documents.

01
Step 1: Complete Our Simple Form

You are required to fill in the details in our simple questionnaire and submit documents — including existing shareholding, proposed allotment, and investor details.

02
Step 2: Draft Documents

We will draft the necessary documents required for the allotment of shares — Board Resolution, EGM Notice, Special Resolution, Letter of Offer, and other agreements.

03
Step 3: File Documents

We will file your documents with the Ministry of Corporate Affairs — including Form PAS-3 (Return of Allotment) within the 30-day statutory window.

04
Step 4: Receive Documents

We will send your documents via courier — including the acknowledgment and the updated register of members.

05
Step 5: Your Work is Now Completed

Once your share allotment gets complete, we send you all the documents and DSCs. Your company's cap table and register are updated.

Why Allot

Why Do Companies Allot Shares?

Common scenarios that trigger a share allotment.

Raise Fresh Capital

The most common reason — issuing new shares brings cash into the company for growth, expansion, or working capital.

Bring In New Investors

To admit angel investors, VCs, or private equity, the company issues new shares in their name.

Reward Existing Shareholders

Bonus shares reward existing shareholders without any cash outflow — boosting their stake and loyalty.

Employee Stock Options (ESOP)

When employees exercise their ESOPs, the company allots shares under the ESOP plan.

Restructure Shareholding

Preferential allotment can be used to rebalance promoter holdings or bring in strategic partners.

Fund Acquisitions or JVs

Shares can be issued as consideration for acquisitions or in joint ventures instead of cash.

What's Included

What is Included in Our Allotment of Shares Package

Everything you need to complete the allotment — documentation and filing.

E-Forms Preparation

Complete preparation of all e-forms required for the allotment — including PAS-3, MGT-14 (where applicable), and other forms based on allotment type.

Documentation

Preparation of the notice, Board Resolution, shareholder Resolution, Letter of Offer, and share certificates.

Stamp Duty Papers & Charges

Preparation and payment of stamp duty papers and charges for the share issuance — based on state-wise rates.

ROC Fees

ROC filing fees for the allotment forms are included in our package.

Documents

Documents Required for Allotment of Shares

Complete Document Checklist
  • Memorandum of Association (MOA) and Articles of Association (AOA)
  • Certificate of Incorporation
  • Current shareholding pattern / Register of Members
  • Board Resolution approving the allotment
  • EGM Notice and Special Resolution (for preferential allotment)
  • Registered valuer's report (for preferential allotment)
  • Letter of Offer to existing shareholders (for rights issue)
  • Share application forms and subscription money receipt
  • PAN, identity proofs, and address proofs of new allottees
  • DSC of directors for e-filing
  • Bank statement showing receipt of subscription money
Important

What Happens If Allotment is Not Done Properly

Improper share allotment creates serious compliance and legal risk.

Penalty Under Section 450

For non-filing of PAS-3 or other mandated forms, the company and officers in default are liable to penalty under Section 450 of the Companies Act, 2013.

Allotment Can Be Challenged

Improper allotment — without proper valuation or shareholder approval — can be challenged by shareholders or regulators, and may be declared void.

Funding Rounds Blocked

Investors and their legal teams will flag compliance gaps during due diligence, delaying or killing the funding round.

Director Disqualification Risk

Repeat non-compliance can lead to director disqualification under Section 164 of the Companies Act.

Pitfalls

Common Mistakes with Allotment of Shares

Missing the 30-day PAS-3 deadline: Form PAS-3 must be filed with the ROC within 30 days of allotment. Delays attract penalties under Section 450.
Skipping valuation for preferential allotment: Preferential allotment requires a registered valuer's report. Without it, the allotment can be challenged and declared void.
No Special Resolution for preferential issue: A Special Resolution is mandatory under Section 62(1)(c) for preferential allotment. Board approval alone is insufficient.
Not issuing share certificates: Share certificates must be issued within 2 months of allotment (or 6 months for a private company in certain cases).
Forgetting stamp duty: Share issuance attracts stamp duty. Non-payment or underpayment creates legal issues with enforceability and future transfers.
Ignoring the pre-emptive rights of existing shareholders: In a rights issue, existing shareholders have a first right to subscribe. Skipping this can lead to disputes.

Call Us For a Quote

We can serve our clients more efficiently thanks to cutting-edge practice technology. Connect with us to discuss your share allotment.

E-Forms Preparation Documentation ROC Fees Included
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Why Us

Why Choose S.K. & Associates for Allotment of Shares

Complete documentation, e-filing, and follow-up — with fees included.

Complete Documentation

Notice, Board Resolution, Special Resolution, Letter of Offer, share certificates — all prepared by our corporate lawyers.

Accurate MCA Filing

Form PAS-3 and other required forms filed with the Ministry of Corporate Affairs within the 30-day window.

ROC Fees Included

ROC filing fees and stamp duty papers are included — no surprise charges later.

Fast Turnaround

Most allotments are completed within 7-15 working days, subject to ROC processing timelines.

End-to-End Support

From questionnaire to courier delivery of final documents — complete support throughout.

30+ Offices, 10+ Years

Backed by 30+ offices across India, 10+ years of experience, and a money-back guarantee.

Complete Your Share Allotment the Right Way

Connect with S.K. & Associates today and complete your share allotment — with documentation, MCA filing, ROC fees, and end-to-end support included.

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Conclusion

Allot Shares with Confidence — Every Step Covered

Allotment of shares isn't just a paperwork exercise. Every allotment — whether it's a rights issue, bonus issue, private placement, or preferential allotment — triggers specific compliance requirements under the Companies Act, 2013. Missing a Board Resolution, valuer's report, or the 30-day PAS-3 filing can turn a simple transaction into a penalty or dispute.

With S.K. & Associates, the entire process is handled by corporate lawyers — from documentation (notice, resolution, letter of offer) to MCA filing, stamp duty, and courier delivery of final documents. Government fees and ROC fees are included, and you get complete support until your share allotment is done. Connect with us today and get it right the first time.

FAQ

Frequently Asked Questions

A Private Limited Company may give its shares by means of the right issue, bonus issue, private placement, and preferential share allotment. The right issue or bonus issue is employed just in case of a share issue to the prevailing shareholders, whereas private placement or preferential share allotment is utilized to supply securities to a particular cluster of people.

The four main types are: (1) Right Issue — shares offered to existing shareholders proportionally, (2) Bonus Issue — free shares issued from company reserves, (3) Private Placement — shares offered to a select group of investors, and (4) Preferential Allotment — shares issued to specific persons on preferential terms.

The package includes: Preparation of E-forms, Documentation (notice, Resolution, Letter of Offer), Stamp duty papers & charges, and ROC fees. We draft all documents, file them with the Ministry of Corporate Affairs, and courier the final documents to you.

Form PAS-3 is the Return of Allotment filed with the ROC within 30 days of allotment. Non-filing or late filing attracts penalty under Section 450 of the Companies Act, 2013. It is one of the mandatory compliance steps after any share allotment.

For a rights issue to existing shareholders, Board approval plus a Letter of Offer is typically sufficient. For preferential allotment or private placement, a Special Resolution of shareholders is mandatory under Section 62(1)(c) of the Companies Act, 2013.

A registered valuer's report determines the fair value of shares being issued. It is mandatory for preferential allotment and private placement to ensure the shares are not issued at undervalue — protecting both the company and existing shareholders.

Most share allotments are completed within 7-15 working days, subject to ROC processing timelines and completeness of documentation.

Key documents include: MOA, AOA, Certificate of Incorporation, current shareholding pattern, Board Resolution, EGM Notice and Special Resolution (for preferential), registered valuer's report, Letter of Offer, share application forms, KYC of allottees, DSC of directors, and bank statement showing subscription money receipt.

Improper allotment can attract penalties under Section 450, may be challenged by shareholders or regulators and declared void, and can block future funding rounds due to compliance gaps found in due diligence.

Yes, technically you can file the forms yourself. However, the process involves multiple legal documents, valuation reports (where applicable), stamp duty calculations, and strict ROC deadlines. Mistakes are costly — most companies prefer professional support.