Explanation:

Share allotment:

An allotment of shares is an acceptance by the company of the offer to take shares.The offer of shares is made on application forms supplied by the company. Generally, the offer is to accept a certain number of shares, or such less number of shares as may be allotted and that offer is accepted by the allotment, either of the total number mentioned in the offer or a lesser number, to be taken by the person who made the offer. When an application money is accepted, it amounts to an allotment. This constitutes a binding contract to make that number according to the offer and acceptance.