Discuss the process for the allotment of shares of a company in case o

1.	Discuss the process for the allotment of shares of a company in case of over subscription.
Answer» When the total number of applications received for shares exceeds the number of shares offered by the company to the public, the situation of oversubscription arises. A company can opt for any of the three alternatives to allot shares in case of oversubscription of shares. • Excess applications are refused and money received on excess applications is returned to the applicants. • The company can allot shares on pro rata basis to all the share applicants. The excess, amount received in the application is adjusted on the allotment. • In this case, the company follows acombination of both the method. It may reject some share applications and may allot some applications on the pro rata basis.

Discuss the process for the allotment of shares of a company in case of over subscription.

Answer»

When the total number of applications received for shares exceeds the number of shares offered by the company to the public, the situation of oversubscription arises. A company can opt for any of the three alternatives to allot shares in case of oversubscription of shares.

• Excess applications are refused and money received on excess applications is returned to the applicants.

• The company can allot shares on pro rata basis to all the share applicants. The excess, amount received in the application is adjusted on the allotment.

• In this case, the company follows acombination of both the method. It may reject some share applications and may allot some applications on the pro rata basis.

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