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allotment of shares

SHARE ALLOTMENT - Register of Members

Adding New Shareholders - Allotment of Share

There are two ways by which a limited company can add a new shareholders. Allotment of shares from the company and transfer of shares from an exisiting member.

Allotment of shares

The allotment of shares is the procedure for a limited company to issue new shares to the exisitng shareholders or to the thrid party investors.

Right issue

A company may invite its existing shareholders to subscribe for the further shares in order to raising capital. If the allotment of shares are made to all existing shareholders in pro rata to their existing share holdings, the company's board of directors has the power to approve the allotment without granting the approval of the general meeting.

Directors' powers of allotment

Except from a rights issue offerred by the company to all existing members, the directors of a company must first obtained the approval from the shareholders of the company in a general meeting before exercising the power of allotment of shares. The approval may specify that the offer, agreement, or option to allot shares will be made within the approval time.

Issuing of share certificates

The allottee becomes a member of the company when his name is entered on the register of members. The company should issue a new share certificate to the new member within two months after the allotment of shares.

Documents required for the allotment of shares
  • A copy of the Articles of Association
  • A copy of the latest Annual Return
  • A copy of the passport of the new shareholders
  • A copy of residential address proof of the new shareholders
  • The Register of Members
Know more about:

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