The main difference between share transfer and share allotment is that when shares are allotted, the company is issuing brand new shares to an existing shareholder or new investor. On the other hand, a share transfer involves a current shareholder selling shares they already hold to an existing shareholder or new investor in the company.
| Share Allotment | Share Transfer |
Payment | The purchase price for the shares is paid to the company | The purchaser pays the seller (i.e. the shareholder who holds the existing shares) |
Issued Share Capital | The number of shares that company has issued (issued share capital) increases because the company is allotting new shares to the shareholder | The issued share capital remains the same because a share transfer only involves the movement of existing shares. |
Process | Typically requires shareholder waiver of pre-emption rights and a shareholder resolution to give the board of the company the authority to allot more shares. | Unless there are share transfer restrictions within the company's Articles of Association, the board approves the share transfer and the seller and purchaser sign a share transfer form. |