Section 39 of Companies Act, 2013 read with Rule 12 of the Companies (Prospectus and Allotment of Securities) Rules, 2014 deals with Allotment of Securities.
1. A company can only make allotment of securities if
- Amount of minimum subscription specified in prospectus has been subscribed &
- The sums payable on application (application money) have been paid to and received by the company by cheque or other instrument.
2. The amount payable on application on every security shall not be less than 5% of the nominal value of the security or such other percentage or amount, as may be specified by the SEBI by making regulations in this behalf.
3. Amount recived above shall be returned, if
- Amount of minimum subscription not recived and
- Sum payable on application is not recived with in 30 days of issue of prospectus, or such other period as may be specified by the SEBI.
The application money shall be repaid within a period of 15 days from the closure of the issue and if any such money is not so repaid within such period, the directors of the company who are officers in default shall jointly and severally be liable to repay that money with interest at the rate of 15% p.a.
4. File Return of Allotment -
- within 30 days of allotment,
- in Form PAS-3, along with the fees to Registrar.
- Alongwith Form PAS-3 a certified list of allottees stating their names, address, occupation, if any, and number of securities allotted to each of the allottees, shall be attached.
- If shares are issued for consideration other than cash (except in case of bonus issue) than attached a copy of the contract, duly stamped with Form PAS-3.
- In the case of issue of bonus shares, a copy of the resolution passed in the general meeting authorizing the issue of such shares shall be attached to the Form PAS-3.
General Principle Regarding Allotment -
- The allotment should be made by proper authority.
- Allotment of securities must be made within a reasonable time.
- The allotment should be absolute and unconditional. The allotment should be absolute and unconditional.
- The allotment must be communicated.
- Allotment against application only.
- Allotment should not be in contravention of any other law.