Valid but irregular allotments -allotment of shares , Business Law and Ethics

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Valid But Irregular Allotments:

An allotment of shares is valid but irregular under S.52 (3) if it was made before the time of the opening of the subscription lists. The section assumes that:

a)      the allotment was not made in contravention of S.50 A or S.53 so as to be void as a consequence, and

b)      the allotment was not made in breach of S.49 or S.51 so as to be voidable as a consequence.

Although the allotment is valid, the company and every officer of the company who is in default shall be liable to a fine not exceeding ten thousand shillings.


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