Share Allotment

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Legal Dimension

Share allotment is governed by the Companies Act, 2013, and the rules and regulations prescribed by the Ministry of Corporate Affairs (MCA) in India. It is a legally binding process that requires compliance with the provisions of the Companies Act and adherence to the guidelines set forth by regulatory authorities.


The standard for share allotment is to ensure compliance with the provisions of the Companies Act, the rules prescribed under it, and other applicable regulations. The process should be carried out in a transparent, fair, and lawful manner, maintaining proper documentation and records.


The Companies Act, 2013, is the primary legislation governing share allotment in India. It sets out the legal framework for issuing and allotting shares, including the conditions, procedures, and requirements for the same. Companies are required to follow the provisions of the Companies Act and any other relevant laws and regulations related to share allotment.

Concerned Authority

The Ministry of Corporate Affairs (MCA) is the concerned authority responsible for regulating and overseeing share allotment in India. It formulates and enforces the rules and regulations governing the issuance and allotment of shares. The Registrar of Companies (RoC), a statutory body under the MCA, plays a crucial role in the registration and approval of share allotment by companies.

Benefits of Share Allotment

Capital Infusion

Share allotment allows a company to raise additional capital by issuing new shares. This infusion of funds can be used for various purposes such as business expansion, research and development, acquisitions, or debt repayment.

Dilution of Ownership

Share allotment can help in diluting the ownership stake of existing shareholders, allowing the company to bring in new investors or strategic partners. This can lead to diversification of ownership and the infusion of new ideas, expertise, and resources into the company.

Flexibility in Capital Structure

Share allotment provides flexibility in adjusting the company's capital structure according to its changing financial needs. It allows the company to increase or decrease its authorized capital, issue different classes of shares, or convert securities into shares based on the requirements of the business.

Fundraising for Startups and SMEs

Share allotment is particularly beneficial for startups and small and medium-sized enterprises (SMEs) as it provides an avenue to raise funds and attract potential investors. It can help in validating the business idea, building credibility, and creating opportunities for future fundraising rounds.

Documents Required

Registered office address

Unique company/certificate number

Identity proofs and business proofs

Class/type and number of shares


Process for Share Allotment

Conduct a board meeting

Provide the report

Prepare a register of members

Submit the documents such as AOA/MOA and COI

Prepare and print the share certificates

Issue a public notice

online registration

Complete the process in 3 Easy Steps

Typically, the stage of answering quick questions regarding share allocation can be completed within a few days to a week.

 Once the quick questions are answered, the next step involves providing assistance and guidance for the share allocation process. This stage can take several weeks to a few months, depending on factors such as the number of shareholders, the complexity of the allocation, and the completion of necessary documentation and approvals.

The completion of the entire share allocation process can take several weeks to a few months. This includes preparing share allocation resolutions, obtaining approvals from the board of directors or shareholders, updating the company's share register, and issuing share certificates to the respective shareholders.

Have Questions? Find Answers Here

Share allotment refers to the process of issuing new shares to shareholders or investors, either through a private placement or a public offering. It involves the allocation of shares based on the authorized capital of the company and the terms of the share issuance.

Shares can be allotted to existing shareholders of the company, new investors, employees through employee share schemes, or any other eligible individuals or entities as determined by the company's board of directors and applicable laws.

Share allotment serves various purposes, including raising capital for the company, facilitating ownership changes, incentivizing employees through stock-based compensation, and accommodating the entry of new investors or strategic partners.

The process of share allotment typically involves obtaining necessary approvals, such as those from the board of directors and shareholders, preparing the necessary documentation (such as allotment letters and share certificates), completing legal formalities, and updating the company's records and statutory filings.

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