A board meeting is a formal gathering of a Board of Directors. Most of the organizations, being public or private, profit or non-profit, are ultimately governed by a body commonly known as Board of Directors. The members of this body cyclically meet to discuss strategic matters. A Board Meeting can be called for discussing the topic of allotment of shares.
The Board of Directors has to assign a Committee of Directors known as the Allotment Committee. Once allotment committee provides its report with respect to allotment of shares, the Board then approves such a report and then passes the resolution for allotting shares to the respective applicants.
Once shares are allotted by the allotment committee, the company secretary sends the letters of allotment to the respective members. The allotment letter refers to a letter that notifies the applicant that the company has allotted a certain number of shares to him. This letter of allotment is considered as the share certificate until the issuance of the final certificate.
The company secretary needs to inform all the shareholders that share certificates are ready and would be delivered in exchange for allotment letters and bankers’ receipt confirming payment of the allotment money. The public notice should be issued for the general information of the members.
Share allotment is the creation and issuing of new shares, by a Company. New shares can be issued to either new or existing shareholders. Share allotment can have implications for any existing shareholders’ share proportion. Typically, new shares are allotted to bring on new business partners.
– Ordinary shares. These carry no special rights or restrictions
– Deferred ordinary shares
– Non-voting ordinary shares
– Redeemable shares
– Preference shares
– Cumulative preference shares
– Redeemable preference shares
At the most fundamental level, supply and demand in the market determine stock price. Price times the number of shares outstanding (market capitalization) is the value of a company.