WHAT DOES THE ALLOTMENT OF SHARES MEAN?
‘Allotment’ is the process by which people become members of a company. Once the subscribers agree to take shares on incorporation, these shares are regarded as ‘allotted’. Later, more people may become the members of the company and be allotted shares. However, the directors must not allot shares without the authority of the existing shareholders. This authority is either stated in the company’s Articles of Association or is given to the directors by resolution passed at a general meeting of the company.
