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What is the position of an applicant for shares bofore allotment and after allotment of shares?
Wiki User
∙ 11y ago
Before allotment of shares position is Applicant. He doesnt owner of the company. He do not have any rights on company profits and he is not liable for company liabilities.
After allotment of shares he become Share Holder. He has right to get company profits. He is the owner of company. He is liable of company liabilites to the extent of his shares.
Wiki User
∙ 11y ago
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What is pro rata allotment of shares?
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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.
Difference between Warrants and Share Application Money Pending Allotment?
Share application money pending allotment is nothing but the application amount is received and shares are not alloted by the company.share warrants are bearer documents which are used at the time of share transfer
What is right share?
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.
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.
What is the procedure of allotment of shares?
what is the procedure of allotment of shares?
What is the procedure for allotment of shares?
what is the procedure of allotment of shares?
What is the difference between issue of shares and allotment of shares?
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.
What is Pro-rata allotment of shares?
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What is pro rata allotment of shares?
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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.
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 the the time period of allotment of share?
The time period of allotment of shares typically ranges from a few days to a few weeks after the closure of the initial public offering (IPO) or after the issuance of shares by a company. This period allows for the processing of applications, verification of payment, and allocation of shares to successful applicants.
Allotment of shares on pro rata basis?
Pro - rata allotment of shares is opted by the Company when there is an over-subscription. The excess application money is adjusted towards the sum due on allotment. We calculate the amount of Pro - rata in the following way: Suppose X Ltd invited applications for 1,00,000 shares and received applications for 1,50,000 shares. In this case the pro - rata is calculated as 1,50,000/1,00,000 = 3:2. Hence the Pro - rata is 3:2.
What is the effect of irregular allotment of shares?
1.Allotment is valid with min fine to BOD - Allotment made with out min application money - Allotment made before expiry of 5th date - Allotment is made without issuing prospectus and state lieu of prospectus to ROC 2.Voidable option to allottee. 3.Void
What are the different modes of acquiring membership?
As person can be a member of a Company bye the following modes or you can say circumstances. In present day corporate scenario there are five different modes of acquiring membership in a company, they are as under:- 1. By Subscribing to Memorandum 2. By application and allotment 3. By Transfer 4. By Transmission 5. By Undertaking to take qualification Shares A brief explanation of the above modes are as follows. 1. By Subscribing to Memorandum: A subscriber to the Memorandum becomes a member on the registration of the Company even though there is no application for shares or allotment. 2. By application and allotment: An application for shares is an offer to take shares. Allotment is acceptance of that offer of the company. When shares are allotted to an applicant, he becomes a member. There is prescribed punishment for those who makes an application in fictitious name to a company for acquiring shares or subscribing any shares to a term which may extend to five years imprisonment. This is to avoid shareholding in the names of fictitious or non existing persons. 3. By Transfer: When a person who purchased the shares from the open market, applies to register his name in the company register of the original share holder and when his name is entered in the register of members, he becomes a member by transfer. 4. By Transmission: When a Share holder is dead and his legal heirs applies for registering their names and when the company entering their name, they become members of the company. 5. By Undertaking to take qualification Shares: A Director who signed an undertaking to take ans pay for the qualification shares is also in the same position as Subscriber of Memorandum. The above are the five modes of acquiring membership of a company under the Companies Act 1956.
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.
