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Basics of Share Allotment

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Submitted By vinishkurup
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asShare allotment and related matters:-

What is meant by allotment of shares?
The Supreme Court in Sri Gopal Jalan and Co. Vs. Calcutta Stock Exchange Association Ltd. (AIR 1964 S.C.250) defined allotment as “the appropriation out of the previously UNAPPROPRIATED capital of the company of a certain number of shares to a person”.
Offer for shares are made on application forms supplied by the company. When an application form is accepted, it amounts to an allotment. The term allotment is not defined under the Companies Act. It means and implies a division of the share capital into defined shares of a particular value or or of different classes and assignment of such shares to different persons.

What is a share?
A ‘share’ means a share in the capital of the company. Section 82 of the Companies Act, 1956 describes share as
A movable property, transferable in the manner provided by the articles of the company.

What is a share certificate?
Section 84 of the Company’s Act, 1956 describes a “share certificate” to mean a certificate under the Common
Seal of the company, specifying any shares held by any member. A share certificate shall be prima facie evidence of title of the member to such shares.

What is meant by transfer of shares?
Shares, for which shares certificates are issued, can be transferred by making an application in the prescribed form signed by the transferor(the shareholder in whose name the share is registered in the Register of members) and the transferee, duly stamped according to the Indian stamp Act and delivering it at the Registered office of the company. Once the share transfer application is approved by the Board of directors of the company, the share transfer will be effected by making necessary changes in the Register of members, by issuing the share certificate to the transferee after noting the name of the transferee as

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