Section 388: Provisions As To Expert's Consent and Allotment
When a company gives shares to an applicant based on the application submitted, it is called Allotment of Shares. The company issues prospectus and application form. The applicant fills the form and submits it, with application money to the company's bankers. The Board of Directors approves the acceptance of such applications in the Board meeting by passing resolution, this is called as Allotment of shares. The Board of Directors has the power to allot shares. Under the Companies Act, 2013, following companies have to issue shares (securities) in dematerialised form:
A company making a public offering in excess of Rs. 10crore.
Unlisted Public Companies for its new issues with effect from 10th Sept. 2018.
Such other class or classes of companies as may be prescribed.
Allotment of Shares:
(a) Any other company can issue its shares in any form.
(b) Also the companies have the freedom to convert its shares into dematerialised form at any point of time.
(c) Companies issuing shares in dematerialised form has to comply with the provisions of the Depositories Act, 1996 and regulations issued there under.
Provisions under Section 388 of Companies Act, 2013: Provisions As To Expert's Consent and Allotment
No person shall issue, circulate or distribute in India any prospectus offering for subscription in securities of a company incorporated or to be incorporated outside India, whether the company has or has not been established, or when formed will or will not establish, a place of business in India.
(a) if, where the prospectus includes a statement purporting to be made by expert, he has not given, or has before delivery of the prospectus for registration withdrawn, his written consent to the issue of the prospectus with the statement included in the form and context in which it is included, or these does not appear in the prospectus a statement that he has given and has not withdrawn his consent as aforesaid; or
(b) if the prospectus does not have the effect, where an application is made in pursuance thereof, of rendering all persons concerned bound by all the provisions of sections 33 and 40, so far as applicable.
2. For the purpose of this section, a statement shall be deemed to be included in a prospectus, if it is contained in any report or memorandum appearing on the face thereof or by reference incorporated therein or issued therewith.