Share allotment is a fundamental process in the realm of corporate finance and company law, referring to the method by which a company distributes its shares to new or existing shareholders. This process marks the official issuance of shares, transforming potential ownership interests into actual stakes in the company. Share allotment is crucial during the formation of a company, subsequent capital raising activities, or when existing shareholders are issued additional shares as part of bonus issues or employee stock options.

Share allotment involves assigning a specified number of shares to an individual or entity, thereby conferring ownership rights, including voting rights and dividends. It serves multiple purposes such as raising capital for expansion, restructuring ownership, or rewarding employees.

• Pricing: Shares can be issued at par value, premium, or discount, subject to legal limits.
• Allotment Committee: Sometimes, a committee is formed to oversee allotments, especially for large issues.
• Pre-emptive Rights: Existing shareholders often have the right to be offered new shares before they are issued to outsiders.
• Compliance and Disclosure: Transparency is maintained through proper disclosures, filings with regulatory authorities, and adherence to statutory procedures.

The process is governed by company laws (like the Companies Act in various jurisdictions), the company’s Articles of Association, and regulations set forth by securities commissions or stock exchanges. Legal procedures ensure transparency, proper record-keeping, and compliance with statutory requirements.