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Irregular allotment

Nagesh gandla (1 Points)

03 August 2018

What is irregular allotment ? brief note on irregular allotment.

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Pranjali (intern) (2216 Points)
Replied 03 August 2018

An irregular allotment of shares would be one which offends against the law. The circumstances for irregular allotment could be: the prospectus not being filed with the registrar or when the munimum subscripttion isn't received. There are various other circumstances where the allotment could be irregular.An irregular allotment could be voidable at the option of the shareholders. However, the company is bound to as if it was a regular allotment if the shareholders do not exercise the option. Moreover, the allotees can claim damages, if any, from the directors who knowingly authorised the allotment.

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Prachi Bansal (3124 Points)
Replied 15 April 2021

Can someone please explain to me why shares are issued at a premium? What is the purpose? How does it affect my share price?

Vatsal Shah (16 Points)
Replied 25 June 2021

When allotment of a share is irregular applicant can get the allotment cancelled at his option and can get the refund of the amount paid on shares.

Vatsal Shah (16 Points)
Replied 25 June 2021

Allotment of shares is considered illegal under the following circumstances:

Share allotted is a contract between a sher older and the company. Search contract can be called valid contract only when all essential elements which are required for valid contract are present all allotment made in absence of such elements is considered illegal.

Share allotment is considered illegal from the beginning if the following element are present or absent.

The applicant who was to become a sare holder must have applied to the company for purchase of a set such application is called an offer.

It is necessary that the company must accept the offer when directors pass resolution 4 seat allotment the offer is said to be accepted by company.

The company most inform shareholders about the the acceptance of application when and allotment letter is sent to the applicant by company it is said that acceptance of offer has been informed.

Consideration is said to be paid when the amount specified against allotment it is paid by the applicant.

If share are allotted against the provisions of article the allotment is considered illegal.

If shares are related by an individual director it is said to be illegal as per the companies act shares can allotted by board of director only.

If there are allotted by violating essential provisions for listing of share of a stock exchange the allotment is considered illegal.

Illegal sale allotment is void from the beginning.No application is required to be made to considered it illegal. Share allotment is illegal when provision under the companies act or other act have been violated