When the companies issue new shares to individuals who come forward to buy the shares either as new or existing shareholders, then this process is known as share issue.
Shares can also be issued to both individuals and corporate bodies. Besides share issue, shares are also allotted, but there is a subtle difference between these two terms ‘share issue’ and ‘share allotment’. Whilst these two terms for most companies and in most instances means exactly the same process. We’ll be using both these terms to mean the same thing here in this article.
The company creates and issues the shares to the people who become the company’s shareholders, this process is known as share allotment. The shares are usually issued by the company at the starting phase of the business and some of the shares are also issued later on by the company when the company has sufficient grown itself.
When the existing shares are transferred from existing shareholder to someone else, this process is known as a share transfer. This will always come into effect when the company has been formed and, whilst the company may be engaged, it is not creating or allotting those shares.