ALLOTMENT OF SHARES
Allotment of shares refers to the activity of a company with respect to allotting its shares to those who have applied to buy the company’s shares after the issue of its prospectus. In other words, the issue of the company’s shares on the basis of the applications received by it is called the allotment of shares.
DEFINITIONS:-
According to Palmer, “Allotment means appropriation to an applicant by a resolution of the directors a certain number of shares in response to an application.”
Allotment means the appropriation of shares to the persons who have sent their application for acquiring the company’s shares. This act is done by a resolution of the board of directors.
Allotment of shares is a kind of a contract and…show more content… 9. Preparing the register of members: After the allotment of shares, the names of the shareholders are entered in the company’s register of members.
RETURN OF ALLOTMENT
When a company with share capital makes an allotment of its shares, it must deliver a return of allotment too the registrar of companies within 30 days after the allotment in which the following must be clarified.
1) The nominal amount of the shares, the number of shares, the name, address and profession of thee allotee, and the amount received and receivable on the shares.
2) If the allotment of shares has been made for a consideration other than cash, then the name and title off the allotee along with the copy of the contract between the company and the allotee must be delivered to the registrar of companies.
3) In case of bonus shares, the return that is sent to the registrar must state the number and nominal amount of such shares.
4) In case of any shares being allotted at a discount, the return of allotment must include a copy of the resolution passed by the company and the permission of the company law board authorising the discount.
LETTER OF ALLOTMENT
After the resolution with respect to the allotment of shares has been passed, the secretary of the company sends a letter of allotment to the applicants which contains :
a. A reference to the application form
b. The number of shares applied for
c. The number of shares allotted
d. The nominal value of the shares allotted
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Lien of shares :
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