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Share Allotment in Corporate Law

Allotment of Shares document outlines the process of allotting shares during a public offering. [1] Allotment refers to the distribution of shares between underwriting financial institutions and other participating parties. [2] Companies issue new shares to raise money for operations, acquisitions, or as rewards to shareholders. [3] Rules and statutes regulate the allotment process to distribute shares appropriately.

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Amit Kumar
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141 views3 pages

Share Allotment in Corporate Law

Allotment of Shares document outlines the process of allotting shares during a public offering. [1] Allotment refers to the distribution of shares between underwriting financial institutions and other participating parties. [2] Companies issue new shares to raise money for operations, acquisitions, or as rewards to shareholders. [3] Rules and statutes regulate the allotment process to distribute shares appropriately.

Uploaded by

Amit Kumar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Allotment of Shares

Submitted By :-
Amit Kumar
BBA. LL.B
Semester-VII, Roll-1007

Submitted To:-

Mrs. Nandita S. Jha

( Rough Draft submitted in partial fulfilment for subject Corporate Law I )

CHANAKYA NATIONAL LAW UNIVERSITY


Introduction
Allotment, in business, is meant to describe a systematic distribution of resources across
different entities and over different time periods. In finance, allotment is normally related to
the distribution of shares during a public share issuance. The public offering is normally
underwritten by two or more financial institutions, of which each are given a specific number
of shares to sell. The distribution of shares is the act of allotting the pot of total equity
between the participating parties. Among other reasons the major reason a company issues
new shares for allotment is to raise money to finance business operations. Company directors
may issue new shares to fund an acquisition or takeover of another business. The new shares
can be allotted to existing shareholders of the acquired company, effectively exchanging their
shares for equity in the acquiring company. New shares can be issued and allotted as a form
of reward to existing shareholders and stakeholders. A scrip dividend, for example, is a
dividend that gives equity holders a number of new shares proportional to the value of what
they would have received if the dividend was cash. There are certain rules and guidelines laid
down through several legislations which are to be followed strictly in this regard.

Research Methodology
The researcher has primarily relied on the Doctrinal Method. The research is based on
comprehensive study of sources which are primarily study of various books, other web
resources, news articles etc. Analytical, critical and Comparative methods are used as major
tools of study in support of the arguments.

Objectives of Study:
The objectives of the study are to know in detail about the allotment of shares by a
company.
To know the statutes which regulate the allotment of shares .

Tentative Chapterisation
Chapter 1: Introduction

Chapter 2: Shares: Purpose and Necessity


Chapter 3: Allotment of Shares

Chapter 4: Rules and Restrictions on Allotment of Shares

Chapter 5: Conclusion

Research Questions

1. What is the need of allotment of shares for a company ?


2. What are the major restriction on allotment of shares ?

Hypothesis

The researcher hypothesizes that allotment of shares means an appropriation of a certain


number of shares to an applicant in response to his application for shares and the process of
allotment is subjected to rules laid down in several concerned statutes in this regard.

BIBLIOGRAPHY

1. Company Law , Dr. G.K. Kapoor & Sanjay Dhamija, 19th edition 2016,
Taxmanns

2. Corporate Law, 5th edition 2016, Lexis Nexis

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