Quick Summary
Share Allotment is the process of distributing shares to applicants based on their applications, creating a binding contract between company and shareholder.
Share Allotment is the distribution of shares to those who have made applications for shares. Upon allotment, a binding contract is created between the company and the allottee, making the allottee a shareholder of the company.
Authority for Allotment
- Board Resolution authorizing allotment
- Power may be delegated to committee
- Must comply with minimum subscription
- Application money must be at least 25% of nominal value
Post-Allotment Compliance
- File PAS-3 within 30 days of allotment
- Attach list of allottees
- Issue share certificates within 2 months
- Make entries in Register of Members
- Update MCA master data
Types of Allotment
- Preferential Allotment: To identified persons
- Rights Allotment: To existing shareholders
- Bonus Allotment: Free shares from reserves
- Private Placement: To select group
- ESOP Allotment: To employees
Penalties for Non-Compliance
- Late filing of PAS-3: ₹200 per day
- Company: ₹1,000 per day, Officers: ₹50,000-₹5,00,000
- Late issuance of share certificates: ₹50,000-₹5,00,000
Key Points
- Distribution of shares to applicants
- Creates binding contract
- File PAS-3 within 30 days
- Issue certificates within 2 months
- Board Resolution required