In brief
A share allotment occurs when a company creates and issues shares to a new or existing shareholder. The company receives the subscription money or other agreed consideration, and the total number of issued shares increases.
A share transfer moves shares that already exist from one shareholder to another. The buyer usually pays the seller, not the company, and the number of issued shares normally stays the same.
When this matters
- Bringing a founder, investor, employee, or strategic partner into a company.
- Reorganising ownership within a family or group.
- Completing an investment round or founder exit.
- Correcting an outdated shareholder register.
- Updating a bank, authority, licence, or beneficial-ownership filing.
Key takeaways
- An allotment can dilute existing shareholders because the issued share pool becomes larger.
- A transfer changes who owns existing shares but does not itself inject capital into the company.
- Constitutional documents, shareholder agreements, pre-emption rights, share classes, and reserved matters can restrict either process.
- Board, shareholder, regulator, lender, or authority approval may be required.
- The register of shareholders, share certificates, UBO records, and official filings must remain consistent after completion.
Recommended approach
- Confirm whether the commercial objective is new investment or a change of owner.
- Review the articles, shareholder agreement, existing rights, and share class.
- Check pre-emption, consent, valuation, regulatory, and licensing conditions.
- Prepare the correct resolutions, subscription or transfer agreement, and instrument of transfer where applicable.
- Receive and document the agreed consideration.
- Update registers, certificates, beneficial ownership, authority records, and banking information.
What you will usually need
For an allotment:
- subscription or investment terms;
- board and, where required, shareholder resolutions;
- evidence of authority to allot and any pre-emption waiver;
- updated capital table, register, and share certificate; and
- evidence of payment or other consideration.
For a transfer:
- share purchase, gift, or internal transfer terms;
- instrument of transfer and existing share certificate;
- required consents or pre-emption waivers;
- board approval to register the transfer where required; and
- updated shareholder and beneficial-ownership records.
Common mistakes
- Calling a founder sale an “investment” even though the company receives no money.
- Calculating percentages without considering the post-allotment share total.
- Ignoring pre-emption or consent rights.
- Signing a transfer document but not updating the legal register.
- Issuing a certificate that conflicts with the official filing.
- Forgetting tax, valuation, foreign-investment, licence, or bank-notification consequences.
Kapiti perspective
The commercial agreement and the corporate record must describe the same event. Kapiti begins with a before-and-after capital table, identifies the approvals and conditions, and then coordinates the documents, registers, UBO updates, and external notifications as one sequence.
Requirements differ materially between jurisdictions and entity types. Legal and tax input should be obtained where rights, value, regulation, or cross-border ownership make the change more than a routine filing.