How will the shares in an issuer be issued and allotted?

In response to the Company Act 2016 which limits the number of shareholders in a private limited company to a maximum of fifty (50) shareholders at any given time, the shares in an issuer will be issued and allotted through a nominee or share trustee arrangement, as the case may be. This process involves appointing a nominee or trustee to hold the shares on behalf of the investors, managing the shareholding structure effectively, especially with numerous small investors. The issuer issues and allots the shares to the nominee or share trustee. Share certificates are issued in the name of the nominee or trustee, while investors will receive documentation from the nominee or trustee confirming their beneficial ownership of the shares.

However, as long as it complies with all applicable laws and is agreed upon by the issuer, direct issuance and allotment of shares to investors remains an option. Investors are advised to review the terms and conditions of the campaign thoroughly to ensure they are satisfied with the method of issuance and allotment of shares.

Last Update: 22 July 2024