Share allotment is the process of creating and issuing new shares (Also see An Overview of Common Shares) carried out by a company. The company can issue new shares to either existing or new shareholders. After the share allotment has taken place, the company should record this event in its register of members within 14 days.
If the company or any officer fails to comply with this requirement, they will be liable to a penalty below RM50,000. If they continue committing the offence, after the conviction, they will be liable to a further fine of below RM500 for each day the offence continues. Hence, companies need to keep a proper record of the events that happened if they do not want to get into heavy penalties. If you own a company and you need help with the processes required, feel free to contact a corporate secretarial firm in Johor Bahru to get assistance from the experts.
Besides, within 14 days from the share allotment, the company should submit a return of allotment to the Registrar. In the return of allotment, the company should include a statement of capital as at the allotment date. This document should also specify the amount and number of shares (Also see Understanding the Issuance of Bonus Shares) involved in the allotment. Apart from that, it needs to include the amount paid, or due and payable, or the company should pay on the allotment.
If the company divide its capital into different classes of shares, the return of allotment should state the class of shares that those shares involved in the allotment belong. Besides, the company should include the name and address of every allottee. It should also state the class and number of shares it has allotted to him. However, a public company does not have to include these particulars in its return of allotment if it has allotted shares for cash or other consideration and it has allotted the shares to more than 500 persons.
If the shares (Also see Registering the Transfer of Shares or Debentures) are allotted or judged to be allotted, no matter whether it has been fully or partially paid in cash, and the share allotment takes place under a contract in writing; the company needs to submit the contract together with the return of allotment as evidence of the entitlement of the allottee. Otherwise, the company needs to lodge a copy of a contract which is similar to it. The contract needs to be certified in a way the Registrar may determine. If the company has submitted a certified copy of it, at the same time, upon the request of the Registrar, it needs to produce the original duly stamped contract to the Registrar.