Allotment means distribution of shares among those who have submitted written application. The new shareholders must apply for shares to be allotted to them, the Directors must approve the allotment of shares, write up the Register of Allotments and Register of Members and file the form B5 with the CRO. A layman may consider both the terms to be synonyms of each other but it is not. A layman may consider both the terms to be synonyms of each other but it is not. Offers for shares are made on application forms supplied by the company. application and allotment account oi - Oxford Index Home. Companies can issue shares to both individuals or corporate bodies, and in another article we look in more detail at the step by step process to issue shares.Alongside the issue of shares, you may see the term ‘share allotment’ used. Issuing of shares and allocation/allotment of shares are two different terms and are used to describe two completely different situations. 69(1) states that no allotment can be made by the company until the minimum subscription has been received. an application for shares only becomes binding on a new shareholder when the company notifies him that it accepts the application. ADVERTISEMENTS: The following points highlight the five main steps for the issue of shares by a company. ... Rs.3 per share … This is known as the application process. A valid allotment has to comply with the requirements of the Act and principles of the law of contract relating to acceptance of offers. For instance, a Company issued 10,000 shares but applications were received for 13,000 shares Therefore, the Company may reject the excess number of applications for 3,000 shares, and by doing so application money must also be returned to the applicants. Meaning: It means an appropriation of a certain number of shares to an applicant in response to his application for shares. In this article, we will discuss the time limits for the allotment and issue of share certificates. Thus, Pro Rata Allotment … What is an Allotment 3. The secretary informs the Board, that the share applications are received and are ready for allotment. Pro Rata Allotment 4. If the issue is just subscribed or undersubscribed, the Board will do the allotment of shares, but if the issue is oversubscribed, the Board appoints an allotment committee to do the allotment work. when an application is accepted, it is an allotment.. Usually, during shares subscription, payment is divided into payment on application, on allotment and call payments. What is reasonable time is a question of fact in each case. What is reasonable time is a question of fact in each case. CONTENTS 1.Overview and Key Difference 2. The shares may be allotted for cash, non-cash and may be allotted at a premium. Allotment of shares refers to the distribution of shares among the shareholders who applied for the shares, other than cash., offers for shares are made on application forms supplied by the company. The key difference between allotment and issue of shares is that an allotment is a method of share distribution in a company whereas share issue is the offering of the ownership of the shares to shareholders to hold, and later transfer to another investor. Share application money may be reported on a balance sheet as current liability. Calls in Arrear 6. Return of Allotment.—(1) Whenever a company having a share capital makes any allotment of its securities, the company shall, within thirty days thereafter, file with the Registrar a return of allotment in Form PAS-3, along with the fee as specified in the Companies … Public companies need approval from their shareholders before issuing shares. Companies - Application and Allotment of Shares. Process Allotment and Issue of Share Certificate. Step … As far as the requirements of the Companies Act apply, the share certificates should be issued within two months of the share allotment. Companies issue shares as a means of raising additional capital to fund business operations or take up new investments. Allotment arises when directors of a company earmark new shares to predetermined shareholders. The steps are: 1. Allotment of shares must be made within a reasonable time (As per Section 6 of the Indian Contract Act, 1872, an offer must be accepted within a reasonable time). This is a brief introduction to the process for recording the initial application and allotment of shares. These are shareholders who have either applied for new … an application for shares only becomes binding on a new shareholder when the company notifies him that it accepts the application.