Allotment is the last step in a sequence, not the first. The offer must already have been made to identified persons in the prescribed form, the money must already be in the separate bank account, and the shareholder approval must already have been passed and filed. Passing an allotment resolution before those steps are complete does not cure them.
Certified True Copy of a Board Resolution
Allotment of securities on a private placement basis
Allotment is the last step in a sequence, not the first. The offer must already have been made to identified persons in the prescribed form, the money must already be in the separate bank account, and the shareholder approval must already have been passed and filed. Passing an allotment resolution before those steps are complete does not cure them.
| Item | Detail |
|---|---|
| Company | [COMPANY NAME], CIN [CIN] |
| Registered office | [ADDRESS] |
| Meeting | Meeting of the Board of Directors |
| Date, time and place | [DATE], [TIME], at [PLACE] |
| Directors present | [NAMES AND DIN] |
| Chairperson | [NAME] |
| Securities allotted | [NUMBER] [equity shares / compulsorily convertible preference shares] of ₹ [FACE VALUE] each |
| Issue price | ₹ [PRICE] per security (face value ₹ [FV] plus premium ₹ [PREMIUM]) |
| Aggregate consideration | ₹ [AMOUNT] |
Matters placed before the Board
The Chairperson placed the following before the Board and confirmed that each step had been completed in the sequence required by law:
(a)the special resolution passed by the members at the [extraordinary] general meeting held on [DATE] approving the offer and issue of securities on a private placement basis to identified persons, and the acknowledgement of its filing with the Registrar of Companies;
(b)the valuation report dated [DATE] issued by [NAME], a registered valuer bearing registration number [NUMBER], supporting the issue price;
(c)[where any allottee is a person resident outside India] the valuation certificate dated [DATE] issued by [NAME] in accordance with the pricing guidelines applicable to foreign investment, confirming that the issue price is not below the fair market value so determined;
(d)the record of the private placement offer made to the identified persons, together with the offer letters issued in the prescribed form and the record of the offer maintained by the Company;
(e)the applications received from the identified persons, together with the list of allottees at Annexure A;
(f)a statement from the bank confirming receipt of the aggregate subscription money of ₹ [AMOUNT] in the separate bank account bearing number [ACCOUNT NUMBER] maintained with [BANK] for the purpose of this private placement, and confirming that no part of it has been utilised; and
(g)confirmation that no part of the subscription money has been received in cash, and that in each case the money has been received from the bank account of the person subscribing.
Resolution
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Almost every private placement defect found in diligence is a sequencing failure rather than a substantive one: the offer letter issued before the special resolution was passed, money received before the separate account was opened, or the allotment made before the shareholder approval was filed. None of these can be cured retrospectively. Annexure C exists to be worked down in order, with dates.
Subscription money on a private placement must be received into a separate bank account maintained for the purpose and must not be utilised before allotment and the filing of the return of allotment. A company that receives the money into its operating account and spends it on payroll has a problem that no subsequent resolution fixes. Open the account before the offer letter goes out, and tell the bank what it is for.
The money must not be received in cash, and must come from the bank account of the person subscribing. Money routed from a third party — a founder paying on behalf of an angel, a parent company paying for a subsidiary — is a defect. Where a subscriber genuinely cannot pay from its own account, restructure the subscription rather than accepting the payment.
Securities must be allotted within the period permitted from receipt of the money. If they are not, the money must be repaid within the further period prescribed, and if it is not repaid within that period, interest runs from the expiry of the allotment period at the prescribed rate. Companies that hold money while negotiating documentation frequently cross this line without noticing.
A private placement may be made only to persons identified in advance by the Board, and the Company must maintain a record of the offer in the prescribed form. An offer made generally, or to persons not previously identified, may be treated as a public offer, which is a far more serious matter. Name the offerees in the Board resolution at step 1.
A preferential allotment requires a valuation report from a registered valuer. Where any allottee is a person resident outside India, the exchange control pricing floor separately requires a valuation certified by a person qualified under those rules. These are different requirements with different qualified certifiers, and practice treats the exchange control certificate as stale after ninety days. Obtain both and time them so that both are current at allotment.
The provision charging a company to tax on the excess of the issue price over fair market value was omitted with effect from assessment year 2025-26 and has not been re-enacted. The Company may issue at any premium without that charge arising. The company law valuation requirement and the exchange control floor are unaffected.
Share certificates attract stamp duty, payable within the period prescribed from issue. Where the securities are dematerialised, duty is collected through the depository or the registrar and transfer agent. Unstamped share certificates are among the most common diligence findings, are inadmissible in evidence until duty and penalty are paid, and cost far more to fix later than to do correctly at issue.
Annexure B includes a headroom line for a reason. An allotment exceeding the authorised share capital is void, and increasing the authorised capital requires its own shareholder resolution, its own filing and its own fee. Confirm headroom before the offer letter is issued, not at the allotment meeting.
Where any allottee is a person resident outside India, the issue must be reported to the authorised dealer bank within the period prescribed. Late reporting attracts a late submission fee, and unreported foreign investment is a contravention requiring compounding, which delays every subsequent round. File on the day of allotment if possible; do not wait for the certificates.
The register of members, the register of preference shareholders where applicable, the certificate register, the capitalisation table and the minute book should all be updated on the date of allotment. A company that updates them quarterly finds that the three records disagree, which is exactly the reconciliation failure that stalls the next round.
Reflects Indian law current as of {{DATE OF USE}}. Forms, timelines, fees and the applicable stamp rates change — confirm each with a company secretary before the offer is made, and again before allotment.
This is a ready-to-use template provided for convenience. Laws and requirements change, and every situation is different — please have it reviewed by a qualified professional (a lawyer, company secretary, or chartered accountant as relevant) before you rely on it.