Q.The capital of a company is divided into number of parts each one of which is called
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Company Allotment Return — The First Meeting
Imagine you start a small business. You need money, so you ask friends to invest. Each friend gives you ₹10,000, and you promise them a share of the company. You write their names in a notebook, note how many shares each got, and that's your record.
Now scale that up to a real company with hundreds of investors. The company can't just scribble names in a diary — the law demands a formal, official record of who owns what. That official record, filed with the government, is the Company Allotment Return.
The Intuition: Why does the government care?
A company is a separate legal person. When it issues shares, it is essentially creating new owners. The government (through the Registrar of Companies, or RoC) needs to know:
- Who are the people now owning the company?
- How many shares were issued?
- Was the money actually received?
Without this, a company could issue fake shares, cheat investors, or hide ownership. The Allotment Return is the company's formal declaration: "Here is exactly what we did, and here is the proof."
The Precise Statement
Company Allotment Return is a statutory document (Form PAS-3 under the Companies Act, 2013) that a company must file with the Registrar of Companies within 30 days of allotting shares. It contains the details of the allotment — number of shares, names of allottees, consideration received, and the basis of allotment.
What goes into it?
The return is not just a list of names. It includes:
| What | Why it matters |
|---|---|
| Date of allotment | The exact day ownership changed hands |
| Number and class of shares | Equity? Preference? How many? |
| Names, addresses, and PAN of allottees | Who are the new owners? |
| Amount payable and amount paid | Was it fully paid up or partly paid? |
| Consideration | Cash, or something else (like a patent or land)? |
| Basis of allotment | Was it a rights issue, bonus issue, or fresh issue? |
A critical detail: Allotment vs. Application
Students often confuse these. Application is when an investor asks for shares. Allotment is when the company says "yes" and actually gives them. The Allotment Return is filed after allotment, not before.
A company cannot file the Allotment Return before the board meeting where allotment is formally approved. The return is evidence of a completed act, not a request for permission.
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