Letter of application for allotment of new shares

What’s letter of application for allotment of new shares and when should you use it?

This letter of application can be used when a person (or persons) apply for shares in a company.

The letter confirms the proposed allotment of new shares and the applicant(s) apply via this letter for either all or a certain number of shares in the relevant allotment.

The applicant(s) also confirm their payment arrangements for the new shares and authorise their name(s) to be added to the register of members.

This letter of application is in open format.

The application letter essentially records what they are willing to invest in your business in return for the shares you’re offering them.

(Please note that this application is drafted for use by private limited companies and is not suitable for public or listed companies.)

What else might you need?

You’ll need this record to accompany the board minutes and resolutions proposing the allotment of the first share issue in your company.

Other documents you’ll need as part of this fundraising activity include share certificates, a shareholder agreement (sometimes called a subscription agreement) and a Constitution – the latter being your company’s rule book (you may well need to adjust some of the rules that you originally started out with in this document to ensure you end up with the right controls and permissions that you need to make decisions for your business – without avoidable interruption or intervention from your new shareholders).