When it comes to the company compliance in India, then there are many forms that businesses need to file with the Registrar of Companies, viz., (RoC) under the Companies Act, 2013. One such important form is PAS-7, which deals specifically with pending share warrants.
For many business owners, professionals, and even young company secretaries, the concept of “share warrants” and their compliance requirements can feel a bit complicated. This blog will break it down into simple terms, explain what PAS-7 is, when it is used, its purpose, the process of filing, and key things to remember.
What is a Share Warrant?
Before understanding PAS-7, it’s important to know what a share warrant is.
A share warrant is a document which is issued by a company that gives the holder the right to acquire the shares of the company at a future date. It is not the same as a share certificate but acts more like an instrument or proof that entitles the holder to receive shares when the required conditions are met.
In simple words, think of it as a promise by the company that the holder can get the shares later.
For example:
- A company may issue share warrants to an investor in exchange for money.
- However, until the investor converts those warrants into actual shares, they remain pending.
Why PAS-7 Form?
The Ministry of Corporate Affairs (MCA) introduced the PAS-7 Form to capture details of all such pending share warrants issued by companies.
The main objective of PAS-7 is:
- To maintain transparency regarding the outstanding share warrants.
- To keep track of how many warrants are pending for conversion into shares.
- To ensure companies are complying with the regulations under the Companies Act, 2013.
Applicability of PAS-7
Who needs to file PAS-7?
Any company which has issued share warrants but where the conversion of such warrants into shares is still pending is required to file PAS-7 with the Registrar of Companies.
When to file PAS-7?
The form needs to be filed whenever a company has pending share warrants, typically as part of its compliance obligations under the Act and Rules.
Purpose of PAS-7
The PAS-7 Form serves several important purposes:
- Legal Record – It helps the RoC maintain a proper record of pending share warrants.
- Transparency – Investors, shareholders, and regulators can know how many warrants are still pending.
- Accountability – Ensures companies are not misusing the instrument of share warrants.
- Corporate Governance – Encourages fair practices by compelling companies to disclose complete information.
Details Required in PAS-7
When filing PAS-7, companies have to provide specific information, such as:
Company Information:
- Corporate Identification Number (CIN)
- Name of the company
- Registered office address
Details of Share Warrants:
- Number of share warrants issued
- Date of issue
- Total amount received against the warrants
- Details of holders of such warrants
- Pending status – whether converted or still outstanding
Authorized Signatory Information:
- Name and designation of the director/CS/authorized signatory filing the form
All this information helps the authorities and stakeholders know exactly how many warrants are still not converted into shares.
Step-by-Step Process of Filing PAS-7
- Download the Form: The PAS-7 form can be downloaded from the MCA portal.
- Fill in Company Details: Enter the company’s CIN, name, and registered office details.
- Enter Warrant Details: Provide complete information about the pending share warrants.
- Attach Documents (if required): In a few cases, documents to support may be required, such as resolutions or lists of warrant holders.
- Digital Signature: The form must be signed with the Digital Signature Certificate, viz., (DSC) of the director/manager/company secretary/authorised person.
- Certification by a Professional: In most cases, the form also requires certification from a practising professional like a Company Secretary, Chartered Accountant, or Cost Accountant.
- Upload to MCA Portal: After signing, the form is uploaded to the MCA portal with the prescribed fee.
Fee for Filing PAS-7
The fee for filing PAS-7 depends on the company’s authorized share capital. The Companies (Registration Offices and Fees) Rules, 2014, provide the fee structure. Generally:
- Small companies and One Person Companies (OPC) may have lower fees.
- Larger companies with higher share capital will pay higher filing fees.
Late filing also attracts additional fees, which can be quite high, so timely filing is always advisable.
Importance of Filing PAS-7
Many companies might think pending share warrants are a minor issue, but in reality, non-compliance can lead to penalties. Filing PAS-7 is important because:
- Statutory Requirement – It is mandatory under the provisions of the Companies Act, 2013.
- Avoids Penalties – Non-filing or delayed filing can attract fines and various legal consequences.
- Investor Confidence – It creates an element of transparency, which builds trust with investors and shareholders.
- Corporate Image – Regular compliance shows good governance practices.
Penalties for Non-Compliance
If a company fails to file the PAS-7, then it may face legal penalties under the Companies Act, 2013. The company and its officers in default may be liable to pay the various monetary fines. The exact penalty will depend on the nature and level of seriousness of the default, but the repeated act of non-compliance may cause serious legal complications.
Practical Example
Let’s understand with a simple example:
ABC Pvt. Ltd. issued 5,000 share warrants to investors in 2023. The warrants were issued at ₹100 each, meaning the company collected ₹5,00,000.
However, by August 2025, 3,000 of those warrants are still pending conversion into shares.
In this case, ABC Pvt. Ltd. must file PAS-7 Form with the MCA, giving details of these 3,000 pending warrants. This ensures the RoC and investors know the status clearly.
Key Points to Remember
- PAS-7 relates only to pending share warrants, not already converted shares.
- Filing must be done online through the MCA portal.
- Proper certification from a professional is usually required.
- Delayed filing leads to additional fees.
- It is part of a company’s annual compliance responsibilities.
Conclusion
The PAS-7 form is a crucial compliance that is required under the Companies Act, 2013, for companies that have issued share warrants but still have some pending for conversion. It ensures elements like accountability, transparency and proper corporate governance.
For the businesses, timely filing of PAS-7 not only avoids penalties but also builds trust and credibility with investors and regulatory authorities.
In today’s era, where corporate transparency is highly valued, complying with requirements like PAS-7 is not just a legal formality but also a way to maintain the company’s reputation and trustworthiness.
If your company has issued share warrants and some are still pending, make sure to file PAS-7 within the time. Seeking professional help from a Chartered Accountant or Company Secretary can make the process easier and error-free.
