Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
The process, step by step
- The board approves the issue; shareholders pass a special resolution.
- Obtain a valuation report to fix the price.
- Send the investor a PAS-4 private-placement offer letter.
- Receive the money into a separate bank account and allot within 60 days.
- File PAS-3 (return of allotment) with the ROC.
Documents and share certificates
Alongside the filings you will usually sign a shareholders’ agreement, issue share certificates, pay stamp duty, and update the register of members. Keeping these tidy matters for the next round’s due diligence.
Foreign investor extras — an example
If the investor is a non-resident, add a FEMA-compliant valuation and file FC-GPR with the RBI within 30 days of allotment. Worked example: a startup raising ₹1 crore from a domestic angel passes a board resolution and a shareholders’ special resolution, obtains a registered-valuer report, sends a PAS-4 offer letter, receives the money into a separate bank account, allots the shares, and files PAS-3 with the ROC within the prescribed time. For a foreign angel, the same steps apply plus the FEMA valuation and FC-GPR. The two filings that most often slip are PAS-3 (company law) and FC-GPR (FEMA) — both are time-bound and both carry late fees, so calendar them the day you allot. Keeping the offer letters, valuation report, bank statement and resolutions together also makes your next round’s due diligence far smoother. Our startup service runs the paperwork end to end.