Discuss the restrictions that have been Idaced upon the first allotment of shares by a company

Where a prospectus is issued by a company inviting offers from .the public to subscribe for its shares, a person who applies for shares makes an ofTer to

subscribc for them and the company accepts the offer by

allotment of share or reject it by intimating and refunding the shareApplication moncy. Thus an application for shares is an offer to take shares and

allotment of shares is the acceptance of that offer by the comIHm,’ and it creates a binding contract between a com I) an” and its shareholdel’, It is on

allotmcnt that shares come into existence. Rc-issuc of forfeited shares is not an “allotment”. so as to bring shares i oto existencc sincc su.ch re-issue

occurs as a result of the sale of the forfeited shares and not of an allotment thereof [Sri Gopa Jaan & Co. J’-:’. Caclltta Stock Exchange Association Ltd.,