What is considered an improper allotment of shares?

An improper allotment of shares typically involves violating legal or regulatory requirements that govern how shares can be issued. Distributing shares without necessary approvals is a clear example of an improper allotment because companies must comply with specific procedures and obtain relevant authorizations from their boards of directors or shareholders before allocating shares. This ensures that the interests of all stakeholders are considered and that the issuance aligns with corporate governance standards.

In contrast, issuing shares to existing shareholders is a common practice known as a rights offering and is typically within legal regulations. Offering shares during a financial crisis may raise ethical questions or concerns but does not inherently violate any laws regarding share allotment. Meanwhile, allotting shares based on employee performance is often a strategy used by companies to incentivize and reward employees, which is generally acceptable as long as it adheres to the company's established policies and relevant laws. Thus, the key issue with option B lies in the failure to adhere to necessary protocols, making it an example of improper share allotment.