Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Allotment definition

What does Allotment mean? In company practice, an allotment is the company’s act of appropriating new shares to an applicant so the applicant acquires the unconditional right to be entered in the register of members for those shares. Under the Companies Act 2006, section 558, shares are taken to be allotted at that point; this statutory meaning applies in England & Wales, Scotland and Northern Ireland. Irish company law uses the term in the same way under the Companies Act 2014, although there is no identical statutory definition. Key features and practice points: - Directors must have authority to allot and must comply...

Allotment of subscriber shares on incorporation under the Companies Act 2006: requirements, process, payment and post-allotment steps; directors’ authority and statutory pre-emption disapplied

Published by a LexisNexis Corporate expert

Practice notes

Under the Companies Act 2006 (CA 2006), a company is brought into existence when one or more persons:

enter their names in a memorandum of association; and
meet the registration requirements laid down by CA 2006.

Anyone who signs a company’s memorandum is commonly referred to as a subscriber for these purposes.

Need for subscriber shares

A company that will have share capital must issue at least one share to each subscriber (subscriber shares), ensuring the company has share capital and at least one shareholder at the point of incorporation.

The prescribed memorandum format reflects this through a straightforward declaration by the subscribers that they:

wish to form a company under CA 2006; and
agree to become members of the company and, where the company is to have share capital, to take at least one share each.

Subscriber shares cannot be allotted on a joint holding basis, because Companies House interprets CA 2006, ss 7 and 8 as requiring each subscriber to be a single natural person or a single corporate entity...

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Web page updated on 21/05/2026

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