What are the rules for allotment of shares?

What are the rules regarding allotment of shares?

The general rules regarding allotment of shares are as foIlows: i) The allotment must be made by proper authority: It is the duty of the Board of’ directors to aIlot the shares. However, the Board may delegate this authority to some other person or persons as per the provisions of the articles of association.

What are the general principles of allotment of shares?

A valid allotment must comply with the requirements of the Company Act and the basic principles of the law of contract about acceptance of an offer. Once an applicant submits the form issued by Company and is accepted, the communication of acceptance is nothing but allotment.

Do shareholders need to approve allotment of shares?

Registration of an allotment is important. The new shareholder(s) will not hold the allotted shares or be a member of the company, until the registration process is complete. any shareholder resolutions (passed at a meeting or using the written resolution) required for the allotment.

Can allotment of shares be Cancelled?

According to clause (e) of Sub-section (1) of Section 61 of the Companies Act, 2013, a limited company having a share capital may, if so authorised by its articles, cancel its shares which, at the date of the passing of the resolution in that behalf, have not been taken or agreed to be taken by any person, and diminish …

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What is allotment and what are the statutory restrictions on allotment of shares?

Statutory restrictions on allotment (S.

The first step towards a valid allotment is the fulfillment of required minimum subscription amount. Every company offering shares to the public has to state a minimum subscription amount in the prospectus.

Who has power to allot shares?

The Board of Directors have the power to allot shares.

Can shareholders allot shares?

From 1 October 2009, directors of companies who are generally authorised by their shareholders to allot shares will be given the power to allot shares pursuant to that authority as if such pre-emption rights did not apply, if authorised to do so by their articles or by special resolution.

How do companies allocate shares?

How to issue shares – step by step

  1. 1 Provide the applicants with a form of application. …
  2. 2 Shares are allotted via board resolution. …
  3. 3 Issue share certificates to those who have been allotted shares. …
  4. 4 Complete a return of allotments via form SH01 to Companies House.