Glenn Chris - Samed

9700717

Whether the decision in Conte v Kpeglo(1964 GLR 311) accurately reflects the law on the allotment of
shares.

In the case of Conte v Kpeglo, which bordered on whether the first defendant was a shareholder of 20%
of the total shares of the company, the Supreme Court overruling the decision of the High Court , held
that the first defendant was not a shareholder of such amount as he claimed. The Court held that
allotment of shared may either be an offer for subscription of shares by a person, or an acceptance of
the company to an offer (application) of a person for shares in the company. The Court further held that
the allotment as acceptance by the company did not immediately make the allottee a shareholder, for in
some circumstances, the allotment may involve a condition which must be fulfilled for the for the
allottee to become a shareholder. This decision accurately reflects the law on the allotment of shares as
discussed in Palmers' company law. According to Palmers' company law, allotment of shares, generally,
comes into play when the company is notifying the person of their acceptance to his offer to acquire
shares in the company. Hence, only after there has been an application for shares, that the company, if
accepting that application will allot shares based upon that application. However, in certain instances,
shares may be allotted to a person where no formal application has been made. In such a case, the
allotment by the company will be an offer, and if the allottee communicates his acceptance of the
allotment(offer) or holds himself out as having accepted it, he will be bound by a contract as owner of
those number of shares, subject to the fulfillment of any conditions subsequent. Hence the decision in
Conte v Kpeglo on the issue of allotment accurately reflects the law on allotment of shares.