# Irregular Allotment
An allotment is termed irregular when statutory conditions for issuing shares to the public are violated. There is no single section defining 'irregular allotment'; instead, it is identified by reference to non-compliance with various provisions.
## Six Grounds of Irregular Allotment
### 1. No Prospectus Issued — Section 23
A company making a public offer is bound to issue a prospectus. Skipping it = irregular allotment.
### 2. Defective or Misleading Prospectus
If the prospectus is silent on mandatory disclosures, or contains misleading/false statements, any allotment made on its basis is irregular.
### 3. Prospectus Not Filed with ROC — Section 26(4)
The prospectus must be filed with the Registrar of Companies on or before the date of publication. Failure makes the allotment irregular.
### 4. Minimum Subscription Not Received — Section 39
If the minimum subscription stated in the prospectus has not been received before allotment, the allotment is irregular.
### 5. Application Money Less than Statutory Minimum
Application money must be at least 5% of the nominal value of the security (or such higher amount as SEBI may prescribe). If less, the allotment is irregular.
### 6. Listing Approval Not Obtained — Section 40
In a public issue, listing approval from one or more recognised stock exchanges must be obtained before allotment. Failure = irregular allotment.
## Quick Reference Table
| Ground | Section |
|---|---|
| No prospectus | Sec 23 |
| Defective prospectus | Sec 26 |
| Not filed with ROC | Sec 26(4) |
| Min. subscription not received | Sec 39 |
| Application money < 5% | Sec 39 / SEBI norms |
| No listing approval | Sec 40 |
## Consequence
Irregular allotment exposes the company and officers to refund, interest, and penalty obligations (mainly under Sections 39 and 40).