ISSUE AND ALLOTMENT OF SHARES
The whole process of issue and allotment of shares is regulated
by the provisions of the Companies Ordinance 1984. In the light of legal provisions,
the process of issue and allotment of shares is explained below:
issue and allotment of shares in company law
1.
Issue of
Prospectus:
By issue of the prospectus, a company invites the general public to subscribe for
its shares. Difference between issue and allotment of shares Within seven o thirty days before the subscription list is due o
open the company is required:
(1)
To publish
the prospectus at least in one Urdu and one English daily newspaper and
(2)
To make available
copies of the prospectus at registered of the company, with the stock exchange and with
the bankers to the issue.
The prospectus
also contains the dates during which the subscription list shall remain open.
2.
Application Form:
The public applies for the subscription of shares on the prescribed forms.
Every prospectus, including the prospectus published in the newspapers,
contains the application form. The application forms also made available at
designated branches of bankers to the issue.
3.
Minimum Number
of Shares to Apply
SECP, from time to time, specifies the minimum nominal value of shares for
which a person can apply.
4.
Application
Money
In Money Application Full Nominal Value of shares is payable with the
application for subscription.
5.
Separate Bank
Account for Application Money
Separate Bank Account for Application Money, the application money is
deposited in a Separate Bank Account.
6.
Restriction
on Allotment
The company is not allowed to make allotment of shares unless it receives
applications up to the amount of minimum subscription.
7.
Allotment of
Shares
Allotment of Shares, the allotments shall be made within ten days of
closure of the subscription list.
8.
Refund of
Money to Unsuccessful Applicants
Refund of Money to Unsuccessful Applicants within ten days after the decision
of allotment of shares the company shall refund the money of the unaccepted
applications.
9.
Returns of
Allotment
Returns of Allotment Within thirty days after the allotment of shares
the company shall file with the registrar a return of the allotment.
10. Issue of Share Certificates
Issue of Share Certificates within ninety days after the allotment of
its shares the company shall issue share certificates to the allotments.
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