answersLogoWhite

0


Best Answer

An allotment of shares is the process in which a person is given the right to be included in the register of members within a specific company. An issuance of shares is when the person is actually issued the shares in which they are deemed entitled to.

User Avatar

Wiki User

9y ago
This answer is:
User Avatar

Add your answer:

Earn +20 pts
Q: What is the difference between issue of shares and allotment of shares?
Write your answer...
Submit
Still have questions?
magnify glass
imp
Related questions

Define and explain issue and allotment of corporate finance?

issue is the companies issuing shares to the public. An allotment process is whereby the shares which have been applied for by the public are allotted to the share applicants in the percentage holding of the company that they have applied for


What is Share Allotment?

The process of allocating shares between shareholders usually pro rata or according to some prior agreement. The allotment may have conditions, which must be satisfied before the shares are issued, eg payment for them. This precedes the actual issue of shares.


What are the requirements for further issue of share capital for a private company?

Section 81 of companies act is not applicable for privte company. So the company can call for board meeting, pass resolution for issue of shares (subject to the authorised capital, if not alteration of MOA and AOA) is required), and allotment of shares, file Form 2 within 30 days of allotment.


What is preferential allotment?

When a listed company doesn't want to go for further public issue and the objective is to raise huge capital by issuing bulk of shares to selected group of people, preferential allotment is a good optionA private placement is an issue of shares or of convertible securities by a company to a select group of persons under Section 81 of the Companies Act, 1956, which is neither a rights issue nor a public issue. This is a faster way for a company to raise equity capital.A private placement of shares or of convertible securities by a listed company is generally known by name of preferential allotment. A listed company going for preferential allotment has to comply with the requirements contained in Chapter XIII of SEBI* (DIP) Guidelines, in addition to the requirements specified in the Companies Act. In short, preferential issue means allotment of equity to some selected people by a company which has its share already listed.*Securities and Exchange Board of India


What do you mean by rights shares?

Right shares are the shares which are offered by the company to the existing shareholders.Simply stated the existing shareholders have a right to subscribe for the shares which are offered by the company after initial allotment until some special right is reserved for any other person by special resolution in this respect. Section 81 i.e Further issue of capital of companies act 1956 deals with this and it states that where at any time after the expiry of two years from the formation of a company or at any time after the expiry of one year from the allotment of shares in that company made for the first time after its formation, whichever is earlier, it is proposed to increase the subscribed capital of the company by allotment of further shares.


What are right shares?

Right shares are the shares which are offere by the company to the existing shareholders.Simply stated the existing shareholders have a right to subscribe for the shares which are offered by hte company after initial allotment until some special right is reserved for any other person by special resolution in this respect. Section 81 i.e Further issue of capital of companies act 1956 deals with this and it states that where at any time after the expiry of two years from the frmation of a company or at any time after the expiry of one year from the allotment of shares in that company made for the first time after its formation, whichever is earlier, it is proposed to increase the subscribed capital of the company by allotment of further shares.


What is difference between authorized stock and issued stock?

Authorized stock has not necessarily been issued. The incorporating state authorizes the corporation to issue a certain number of shares of stock. All shares of a company are authorized... not all are issued.


What is oversubscription of shares?

When demand for a particular share is more than its supply, it is said to be oversubscribed. Oversubscription leads to sky high cut-off prices of shares and often leads to non-allotment of shares. It is always good to get an idea of oversubscription beforehand and bid accordingly. EG: If a person bids for 10 shares in retail category and the issue is oversubscribed 2 times, he wiill get only 5 shares.


What is the procedure for issue of bonus share adopted by a company?

Conditions for issue of bonus shares :For making an issue of bonus shares, the following conditions must be complied with:(1) Sufficient undistributed profits must be there.(2) Articles must permit such an issue.(3) Suitable resolution by the Board of Directors must be passed.(4) Formal approval of the shareholders in a general meeting must be secured.(5) Permission of the 'Controller of Capital Issues' must be obtained under the Capital Issues Control Act, 1947, regardless of the amount involved. There is no lower exemption limit in case of bonus share because care is taken to see that the company does not get over-capitalised in the process, and that the issue satisfies the guide­lines prescribed by the Government in that regard. It is worth noting here that the said permission is required to be obtained by every company whatsoever-private company, banking and insurance com­pany, government company and public company.Procedure on Issue of Bonus Shares :The secretarial procedure followed in the issueof bonus shares may briefly be stated as follows :(1) To ensure that Articles permit the issue of bonus shares. If not, the Articles should be suitably amended.(2) To ensure that the bonus issue is within the limits of authorized share capital of the company. If not, memorandum and articles have to be suitably amended.(3) To convene a meeting of the Board of Directors:to consider the proposal for 'Bonus Issue' and the proportion in which the same should be issued.to fix up the date, time, place and agenda of the extra-ordinary general meeting to be convened for securing the approval of the shareholders.to approve the date of closing the Register of Members and transfer books.(4) If the company's shares are listed on a Stock Exchange, to notify the Exchange of the date of the Board meeting which will consider the issue of bonus shares and further to notify the Exchange of the decision in that regard immediately after a formal decision has been taken.(5) To issue notices to members relating to the aforesaid general meeting along with the explanatory statement.(6) To pass a resolution in the general meeting, as per Articles. If it is a special resolution a copy thereof to be filed with the Registrar within 30 days.(7) To obtain the permission of the Controller of Capital Issues regardless of the amount involved.(8) To obtain the approval of stock exchange(s) for the procedure to be followed for allotment of bonus shares.(9) To obtain the approval of the Reserve Bank of India, under the foreign Exchange Regulation Act, 1973, for allotment of bonus shares to non-resident members, if any.(10) To prepare 'provisional allotment sheets' i.e., the lists of members showing their present shareholding and the number of bonus shares to which they are entitled.(11) To convene another Board meeting: (i) to approve the 'provi­sional allotment sheets' and to pass an allotment resolution, and (ii) to approve the date of closing the Register of Members and transfer books.(12) To give a public notice in some leading newspaper regarding the closure of Register of Members and transfer books for the purpose of issue of bonus shares. (A specimen of such a notice is given at the end of this chapter)(13) To issue Allotment Letters to the members along with a circular-explaining how the allotment has been made.(14) To file with the Registrar within 30 days of allotment a 'Return of Allotment' stating: (i) the number and nominal amount of the bonus shares so allotted; (ii) names, addresses and occupations of the allottees; and (iii) a copy of the resolution authorising the issue of such shares [Sec. 75(1) (c)(i)].(15) To make necessary entries in the Register of Members.(16) To prepare and issue new share certificates.


Difference between right shares and bonus shares?

RIGHT SHARESto increases company's capital they issue right shares. exiting shareholder have prior right to buy this shares so it's called 'right shares'. issue of right shares increases company's capital.BONUS SHARESmany company not distribute dividends each year and this profit is added in reserves after some year company's capital is less than company's size so company capitalized it's reserves by issuing bonus shares. bonus shares decres shares price. this shares is given to the exisiting shareholer in propoastion of holding the shares.


What is stock and contracted allotment?

Contracted allotment of stock is the authorized amount of stock that company may issue for various reasons. Typically, an allotment of stock will be issued in lieu of cash when acquisitions occur.


What is the difference between private banking and non-private banking?

"There are many differences between private banking and non-private banking. The differences are as follows: number of directors, issue of prospectus, consent of directors, and the transferability of shares."