{"id":19162,"date":"2021-11-21T23:28:46","date_gmt":"2021-11-21T17:58:46","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=19162"},"modified":"2021-11-22T13:05:43","modified_gmt":"2021-11-22T07:35:43","slug":"procedure-for-issue-of-bonus-shares-under-companies-act","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/procedure-for-issue-of-bonus-shares-under-companies-act\/","title":{"rendered":"Procedure for Issue of Bonus shares under Company Act"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a019bd089ea4\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a019bd089ea4\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><ul class='ez-toc-list-level-2'><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/procedure-for-issue-of-bonus-shares-under-companies-act\/#Procedure_for_Issue_of_Bonus_shares_under_Companies_Act\" title=\"Procedure for Issue of Bonus shares under Companies Act\">Procedure for Issue of Bonus shares under Companies Act<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/procedure-for-issue-of-bonus-shares-under-companies-act\/#Advantage_of_Bonus_Shares_Issue\" title=\"Advantage of Bonus Shares Issue\">Advantage of Bonus Shares Issue<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/procedure-for-issue-of-bonus-shares-under-companies-act\/#ISSUANCE_OF_BONUS_SHARES_RULE_REGULATORY_OF_COMPANY_LAW\" title=\"ISSUANCE OF BONUS SHARES RULE &amp; REGULATORY OF COMPANY LAW \u00a0\">ISSUANCE OF BONUS SHARES RULE &amp; REGULATORY OF COMPANY LAW \u00a0<\/a><ul class='ez-toc-list-level-2'><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/procedure-for-issue-of-bonus-shares-under-companies-act\/#In_Case_of_Listed_Company_SEBI_ICDR_Regulations_2009\" title=\"In Case of Listed Company:\u00a0SEBI\u00a0(ICDR) Regulations, 2009\">In Case of Listed Company:\u00a0SEBI\u00a0(ICDR) Regulations, 2009<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/procedure-for-issue-of-bonus-shares-under-companies-act\/#SOURCES_OF_FOR_ISSUANCE_OF_BONUS_SHARE\" title=\"SOURCES OF FOR ISSUANCE OF BONUS SHARE:\">SOURCES OF FOR ISSUANCE OF BONUS SHARE:<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/procedure-for-issue-of-bonus-shares-under-companies-act\/#In_Case_of_Unlisted_Company\" title=\"In Case of Unlisted Company:\">In Case of Unlisted Company:<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/procedure-for-issue-of-bonus-shares-under-companies-act\/#CONDITIONS_FOR_ISSUE_OF_BONUS_SHARE\" title=\"CONDITIONS FOR ISSUE OF BONUS SHARE:\">CONDITIONS FOR ISSUE OF BONUS SHARE:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/procedure-for-issue-of-bonus-shares-under-companies-act\/#What_are_the_restrictions_on_withdrawal_of_bonus_issue\" title=\"What are the restrictions on withdrawal of bonus issue?\">What are the restrictions on withdrawal of bonus issue?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/carajput.com\/blog\/procedure-for-issue-of-bonus-shares-under-companies-act\/#ISSUANCE_OF_BONUS_SHARE_CHECKLIST\" title=\"ISSUANCE OF BONUS SHARE CHECKLIST\">ISSUANCE OF BONUS SHARE CHECKLIST<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/carajput.com\/blog\/procedure-for-issue-of-bonus-shares-under-companies-act\/#WHAT_IS_PROCEDURE_FOR_ISSUE_OF_BONUS_SHARES\" title=\"WHAT IS PROCEDURE FOR ISSUE OF BONUS SHARES? \">WHAT IS PROCEDURE FOR ISSUE OF BONUS SHARES? <\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/carajput.com\/blog\/procedure-for-issue-of-bonus-shares-under-companies-act\/#FAQs_issue_of_Bonus_shares\" title=\"FAQ\u2019s issue of Bonus shares\u00a0\">FAQ\u2019s issue of Bonus shares\u00a0<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/carajput.com\/blog\/procedure-for-issue-of-bonus-shares-under-companies-act\/#Q1_Is_it_possible_for_a_corporation_to_issue_preference_shares_in_addition_to_equity_shares_in_a_bonus_issue\" title=\"Q1.: Is it possible for a corporation to issue preference shares in addition to equity shares in a bonus issue?\">Q1.: Is it possible for a corporation to issue preference shares in addition to equity shares in a bonus issue?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/carajput.com\/blog\/procedure-for-issue-of-bonus-shares-under-companies-act\/#Q2_What_will_be_the_bonus_share_issue_price\" title=\"Q2.: What will be the bonus share issue price?\">Q2.: What will be the bonus share issue price?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/carajput.com\/blog\/procedure-for-issue-of-bonus-shares-under-companies-act\/#Q3_Is_it_possible_for_a_firm_to_issue_Bonus_Shares_to_people_who_arent_already_shareholders\" title=\"Q3.: Is it possible for a firm to issue Bonus Shares to people who aren&#8217;t already shareholders?\">Q3.: Is it possible for a firm to issue Bonus Shares to people who aren&#8217;t already shareholders?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/carajput.com\/blog\/procedure-for-issue-of-bonus-shares-under-companies-act\/#Q4_Can_a_company_issue_Bonus_Shares_that_are_only_partly_paid_up\" title=\"Q4.: Can a company issue Bonus Shares that are only partly paid up?\">Q4.: Can a company issue Bonus Shares that are only partly paid up?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/carajput.com\/blog\/procedure-for-issue-of-bonus-shares-under-companies-act\/#Q5_Is_it_possible_for_a_company_to_issue_Bonus_Shares_in_a_different_ratio_to_its_current_shareholders\" title=\"Q5.: Is it possible for a company to issue Bonus Shares in a different ratio to its current shareholders?\">Q5.: Is it possible for a company to issue Bonus Shares in a different ratio to its current shareholders?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/carajput.com\/blog\/procedure-for-issue-of-bonus-shares-under-companies-act\/#Q7_Can_a_company_withdraw_its_proposal_for_a_bonus_issue_after_it_has_been_declared_by_its_Board_of_Directors\" title=\"Q7.: Can a company withdraw its proposal for a bonus issue after it has been declared by its Board of Directors?\">Q7.: Can a company withdraw its proposal for a bonus issue after it has been declared by its Board of Directors?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/carajput.com\/blog\/procedure-for-issue-of-bonus-shares-under-companies-act\/#Q8_Is_it_possible_for_a_company_to_give_Bonus_Shares_than_a_dividend\" title=\"Q8.: Is it possible for a company to give Bonus Shares than a dividend?\">Q8.: Is it possible for a company to give Bonus Shares than a dividend?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/carajput.com\/blog\/procedure-for-issue-of-bonus-shares-under-companies-act\/#Q9_What_are_the_most_common_methods_for_a_company_to_issue_Bonus_Shares\" title=\"Q9.: What are the most common methods for a company to issue Bonus Shares?\">Q9.: What are the most common methods for a company to issue Bonus Shares?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/carajput.com\/blog\/procedure-for-issue-of-bonus-shares-under-companies-act\/#Q10_How_may_a_company_issue_Bonus_Shares_if_its_AOA_prohibits_or_restricts_the_issuance_of_Bonus_Shares\" title=\"Q10.: How may a company issue Bonus Shares if its AOA prohibits or restricts the issuance of Bonus Shares?\">Q10.: How may a company issue Bonus Shares if its AOA prohibits or restricts the issuance of Bonus Shares?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/carajput.com\/blog\/procedure-for-issue-of-bonus-shares-under-companies-act\/#Q11_Can_the_company_allot_shares_under_a_Bonus_Issue_if_the_shares_are_partially_paid_up\" title=\"Q11.: Can the company allot shares under a Bonus Issue if the shares are partially paid up?\">Q11.: Can the company allot shares under a Bonus Issue if the shares are partially paid up?<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h3><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-19164\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/11\/Procedure-for-Issue-of-Bonus-shares-under-Companies-Act.jpg\" alt=\"Procedure for Issue of Bonus shares under Companies Act\" width=\"1280\" height=\"480\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/11\/Procedure-for-Issue-of-Bonus-shares-under-Companies-Act.jpg 1280w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/11\/Procedure-for-Issue-of-Bonus-shares-under-Companies-Act-300x113.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/11\/Procedure-for-Issue-of-Bonus-shares-under-Companies-Act-1024x384.jpg 1024w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/11\/Procedure-for-Issue-of-Bonus-shares-under-Companies-Act-768x288.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/11\/Procedure-for-Issue-of-Bonus-shares-under-Companies-Act-800x300.jpg 800w\" sizes=\"(max-width: 1280px) 100vw, 1280px\" \/><\/h3>\n<h2><span class=\"ez-toc-section\" id=\"Procedure_for_Issue_of_Bonus_shares_under_Companies_Act\"><\/span><span style=\"color: #ff0000;\"><strong><u>Procedure for Issue of Bonus shares under Companies Act<\/u><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"color: #000080;\"><strong>BONUS SHARES MEANING<\/strong><\/span><\/p>\n<p>Bonus Shares are additional shares issued by a firm with a share capital to its current shareholders without receiving any payment from those shareholders.<\/p>\n<p>Existing shareholders are offered free additional shares in proportion to their current holdings.<\/p>\n<p>The basic principle behind a bonus issue is that the total number of shares issued grows at a fixed ratio of shares held to outstanding shares.<\/p>\n<p>For Example: If an existing shareholder of the company has 200 shares and the corporation declares a 4:1 bonus, he will receive four additional shares for free. That&#8217;s a total of 800 shares for free, and his total holdings will rise to 1000 shares after the Bonus Shares are issued.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-19170\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/11\/image-35..jpg\" alt=\"Bonus Share \" width=\"904\" height=\"678\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/11\/image-35..jpg 720w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/11\/image-35.-300x225.jpg 300w\" sizes=\"(max-width: 904px) 100vw, 904px\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Advantage_of_Bonus_Shares_Issue\"><\/span><span style=\"color: #000080;\"><strong><em><u>Advantage of Bonus Shares Issue<\/u><\/em><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>The issuance of bonus shares increases the number of outstanding shares and the participation of smaller investors in the Company&#8217;s stock, improving liquidity.<\/li>\n<li>When an investor receives bonus shares, he or she is not required to pay any taxes.<\/li>\n<li>Bonus shares are a sign of the company&#8217;s health. It&#8217;s a hint that the company will be able to service its higher debt.<\/li>\n<li>The bonus issuance allows the corporation to save money and reinvest it back into the business.<\/li>\n<li>The perception of the company&#8217;s size grows as the issued share capital grows.<br \/>\nIncrease the Company&#8217;s share base by encouraging retail participation.<\/li>\n<li>Issuing additional shares &amp; using cash for business growth of Company increases investor belief in operation of the Company.<\/li>\n<\/ul>\n<h1><span class=\"ez-toc-section\" id=\"ISSUANCE_OF_BONUS_SHARES_RULE_REGULATORY_OF_COMPANY_LAW\"><\/span><span style=\"color: #ff0000;\"><strong>ISSUANCE OF BONUS SHARES RULE &amp; REGULATORY OF COMPANY LAW \u00a0<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h1>\n<h2><span class=\"ez-toc-section\" id=\"In_Case_of_Listed_Company_SEBI_ICDR_Regulations_2009\"><\/span><strong>In Case of Listed Company:\u00a0<\/strong>SEBI\u00a0(ICDR) Regulations, 2009<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"SOURCES_OF_FOR_ISSUANCE_OF_BONUS_SHARE\"><\/span><span style=\"color: #000080;\"><strong>SOURCES OF FOR ISSUANCE OF BONUS SHARE:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Under Section 63 state that company can issue bonus shares(fully paid-up) to its members out of-\n<ul>\n<li>Securities premium A\/c or<\/li>\n<li>Free reserves or<\/li>\n<li>Capital redemption reserve A\/c<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-19167\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/11\/image-14.png\" alt=\"bonus share\" width=\"892\" height=\"525\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/11\/image-14.png 583w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/11\/image-14-300x177.png 300w\" sizes=\"(max-width: 892px) 100vw, 892px\" \/><\/p>\n<h2><span class=\"ez-toc-section\" id=\"In_Case_of_Unlisted_Company\"><\/span><span style=\"color: #000080;\"><strong>In Case of Unlisted Company:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li>Rule 14 of Companies (Share Capital and Debentures) Rules, 2014 and<\/li>\n<li>Under Section 63 of Companies Act, 2013<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\"><strong>Exception in Case of Bonus Share:<\/strong><\/span><\/p>\n<ul>\n<li>Company can Not issue of bonus shares out of capitalizing reserves created by Revaluation of assets.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"CONDITIONS_FOR_ISSUE_OF_BONUS_SHARE\"><\/span><span style=\"color: #000080;\"><strong>CONDITIONS FOR ISSUE OF BONUS SHARE:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-19168\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/11\/BonusIssue.jpg\" alt=\"Bonus+Issue\" width=\"922\" height=\"626\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/11\/BonusIssue.jpg 922w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/11\/BonusIssue-300x204.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/11\/BonusIssue-768x521.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/11\/BonusIssue-800x543.jpg 800w\" sizes=\"(max-width: 922px) 100vw, 922px\" \/><\/p>\n<p>The following Requirements must be satisfied before bonus shares issuing:<\/p>\n<ol>\n<li>Bonus Shares Issue is authorized by its AOA;<\/li>\n<li>Bonus Shares are being issued on the recommendation of the BOD &amp; been authorized in general meeting of the company.<\/li>\n<li>Companyhas not defaulted in principal or payment of interest in respect of fixed\u00a0depositsor debt securities issued by it;<\/li>\n<li>Company has not defaulted in respect of Payment of statutory dues of Employees, Like that contribution to gratuity, provident fund &amp; bonus.<\/li>\n<li>Partly paid-up shares, if any O\/s on date of allotment are made fully paid-up.<\/li>\n<li>It complies with such requirements as may be specified.<\/li>\n<\/ol>\n<h3><span class=\"ez-toc-section\" id=\"What_are_the_restrictions_on_withdrawal_of_bonus_issue\"><\/span><span style=\"color: #000080;\"><strong>What are the restrictions on withdrawal of bonus issue?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Company which has once announced decision of its BOD recommending a bonus issue shall not subsequently withdraw announcement of bonus share (Rule 14 of Companies (Share Capital and Debentures) Rules, 2014)<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"ISSUANCE_OF_BONUS_SHARE_CHECKLIST\"><\/span><span style=\"color: #000080;\"><strong>ISSUANCE OF BONUS SHARE CHECKLIST<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>While issuance of Bonus Shares, below checkpoints must be ensured:<\/p>\n<ul>\n<li>Company AOA authorizes issue of bonus share. If the same thing is not found, then we needed to amend the AOA.<\/li>\n<li>Company authorized capital is proper adequate sufficient to issue Bonus Shares, If it not sufficient capital then authorized capital increase first.<\/li>\n<li>Bonus issue were issued using free reserves derived from genuine profits, capital redemption reserve accounts, and securities premiums.<\/li>\n<li>The company has not defaulted in paying interest or principal on fixed deposits or debt instruments it has issued, or in paying statutory dues to employees such as provident fund contributions, gratuities, or Bonus issue.<\/li>\n<li>Reserves created as a result of asset revaluation are not utilised to issue Bonus Shares.<\/li>\n<li>Any party paid-up shares, if any, are made fully paid-up before the Board of Directors recommends the bonus issuance.<\/li>\n<li>Bonus issue are not issued in place of dividends.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"WHAT_IS_PROCEDURE_FOR_ISSUE_OF_BONUS_SHARES\"><\/span><strong><span style=\"color: #ff0000;\">WHAT IS PROCEDURE FOR ISSUE OF BONUS SHARES?<\/span> <\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-19172\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/11\/Bouns-Share.png\" alt=\"Bonus Share\" width=\"866\" height=\"494\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/11\/Bouns-Share.png 580w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/11\/Bouns-Share-300x171.png 300w\" sizes=\"(max-width: 866px) 100vw, 866px\" \/><\/p>\n<ol>\n<li>Issue a notice of board meeting at least seven days before the meeting [Section 173(3)].<\/li>\n<li>In the case of a publicly listed company, notify the stock exchange at least two working days before the Board Meeting.<\/li>\n<li>Hold a Board Meeting and ask the Board to approve the below proposal:<\/li>\n<\/ol>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>To recommend the Bonus Issue;<\/li>\n<li>To Fix Ratio &amp; quantum of Bonus Issue;<\/li>\n<li>To approve the Notice of General Meeting;<\/li>\n<li>To decide the date, Venue &amp; Time of EGM;<\/li>\n<li>To authorize director or CS for issue of Notice of GM &amp; do all required acts for issuance of Bonus Shares.<\/li>\n<li>Pass BOD Resolution for Issue of Bonus Shares and Alteration in AOA\/ MOA(Subject to approval of Members), if so required.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ol start=\"4\">\n<li>Issue Notice for calling EGM at least twenty-one clear days before the date of EGM.<\/li>\n<li>Pass Ordinary-Resolution by Hold the Extra-Ordinary General Meeting for issue of bonus shares.<\/li>\n<li>Then Need to file\u00a0Form MGT-14with the ROC within thirty days of passing of the Ordinary-Resolution. Below documents shall be attached with Form MGT-14:<\/li>\n<\/ol>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>Notice with Explanatory Statements.<\/li>\n<li>Altered AOA, If AOA altered Certified Copy<\/li>\n<li>All Resolution Passed at EGM Certified True Copy<\/li>\n<li>Altered MOA, if MOA altered Certified Copy<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ol start=\"7\">\n<li>Next Issue Notice of BOD &amp; hold BOD Meeting for passing resolution for Bonus Shares Allotment.<\/li>\n<li>Next Step is to file (Return of Allotment)- Form PAS-3 within 30 days of allotment. We have make sure that below documents shall be attached with form PAS-3:<\/li>\n<\/ol>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>Board Resolution Certified True Copy.<\/li>\n<li>Ordinary Resolution passed for issue of Bonus Shares Certified Copy.<\/li>\n<li>Allotees List, address, mentioning name, Number of Shares Allotted, Pan Card Number.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>9. Within two months of the bonus issue&#8217;s allotment, issue Shares Certificates to all allottees.<\/p>\n<p>10. Immediately after allotment of shares, inform the Depository of the facts of the allotment.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"FAQs_issue_of_Bonus_shares\"><\/span><span style=\"color: #ff0000;\"><strong>FAQ\u2019s issue of Bonus shares<\/strong><\/span><strong>\u00a0<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"Q1_Is_it_possible_for_a_corporation_to_issue_preference_shares_in_addition_to_equity_shares_in_a_bonus_issue\"><\/span><span style=\"color: #000080;\"><strong>Q1.: Is it possible for a corporation to issue preference shares in addition to equity shares in a bonus issue?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><strong>Answer:<\/strong> Because the Companies Act of 2013 does not specify any specific types of shares that can be issued under a bonus issue, a firm can issue both equity and preference shares.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Q2_What_will_be_the_bonus_share_issue_price\"><\/span><span style=\"color: #000080;\"><strong>Q2.: What will be the bonus share issue price?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><strong>Answer:<\/strong> Since Bonus Shares are not issued at a cost, the issue price is irrelevant.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Q3_Is_it_possible_for_a_firm_to_issue_Bonus_Shares_to_people_who_arent_already_shareholders\"><\/span><span style=\"color: #000080;\"><strong>Q3.: Is it possible for a firm to issue Bonus Shares to people who aren&#8217;t already shareholders?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><strong>Answer:<\/strong> No, a corporation cannot issue Bonus Shares to anyone other than present shareholders. Bonus shares can only be issued to members\/shareholders whose names appear in the Register of Members on the record date.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Q4_Can_a_company_issue_Bonus_Shares_that_are_only_partly_paid_up\"><\/span><span style=\"color: #000080;\"><strong>Q4.: Can a company issue Bonus Shares that are only partly paid up?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><strong>Answer:<\/strong> \u00a0No, Bonus Shares will never be issued unless they are fully paid up.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Q5_Is_it_possible_for_a_company_to_issue_Bonus_Shares_in_a_different_ratio_to_its_current_shareholders\"><\/span><span style=\"color: #000080;\"><strong>Q5.: Is it possible for a company to issue Bonus Shares in a different ratio to its current shareholders?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><strong>Answer:<\/strong> No, the company cannot issue bonus shares in varied ratios; instead, bonus shares will be issued to existing shareholders in proportion to their current holdings.<\/p>\n<p><span style=\"color: #000080;\"><strong>Q6.: Is it possible for a company to issue Bonus Shares using reserves generated by asset revaluation?<\/strong><\/span><\/p>\n<p><strong>Answer:<\/strong> Section 63 mandates that no bonus shares may be issued by capitalization reserves created by asset revaluation.<\/p>\n<ul>\n<li>Securities premium account; or<\/li>\n<li>capital redemption reserve account. or<\/li>\n<li>Its free reserves;<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Q7_Can_a_company_withdraw_its_proposal_for_a_bonus_issue_after_it_has_been_declared_by_its_Board_of_Directors\"><\/span><span style=\"color: #000080;\"><strong>Q7.: Can a company withdraw its proposal for a bonus issue after it has been declared by its Board of Directors?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><strong>Answer:<\/strong> Rule 14 of the Companies (Share Capital and Debentures) Rules, 2014 states that a company that has declared its Board of Directors&#8217; decision to recommend a bonus issuance may not withdraw it subsequently.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Q8_Is_it_possible_for_a_company_to_give_Bonus_Shares_than_a_dividend\"><\/span><span style=\"color: #000080;\"><strong>Q8.: Is it possible for a company to give Bonus Shares than a dividend?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><strong>Answer:<\/strong> A bonus issue cannot be substituted for a dividend.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Q9_What_are_the_most_common_methods_for_a_company_to_issue_Bonus_Shares\"><\/span><span style=\"color: #000080;\"><strong>Q9.: What are the most common methods for a company to issue Bonus Shares?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><strong>Answer:<\/strong> Section 63 permits a company to issue fully paid-up bonus shares to its members as an out-of-pocket expense.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Q10_How_may_a_company_issue_Bonus_Shares_if_its_AOA_prohibits_or_restricts_the_issuance_of_Bonus_Shares\"><\/span><span style=\"color: #000080;\"><strong>Q10.: How may a company issue Bonus Shares if its AOA prohibits or restricts the issuance of Bonus Shares?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><strong>Answer:<\/strong> \u00a0In this situation, a company can change its AOA by adopting a Special Resolution under Section 14 of the Companies Act, 2013.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Q11_Can_the_company_allot_shares_under_a_Bonus_Issue_if_the_shares_are_partially_paid_up\"><\/span><span style=\"color: #000080;\"><strong>Q11.: Can the company allot shares under a Bonus Issue if the shares are partially paid up?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><strong>Answer:<\/strong> \u00a0In this situation, the company has been unable to issue shares. Before the bonus issuance is recommended by the Board of Directors, any party paid up shares are made fully paid up.<\/p>\n<p><span style=\"color: #000080;\"><strong>Popular Articles:<\/strong><\/span><\/p>\n<ul>\n<li><a href=\"https:\/\/carajput.com\/blog\/new-online-filing-eform-dir-3-ekyc-directors-for-fy-2019-20\/\">New Online filing eForm DIR-3 eKYC Directors<\/a><\/li>\n<li><a href=\"https:\/\/carajput.com\/blog\/closure-of-subsidiary-company\/\">CLOSURE OF SUBSIDIARY COMPANY<\/a><\/li>\n<li><a href=\"https:\/\/carajput.com\/blog\/compliance-for-foreign-subsidiary-companies-in-india\/\">Compliance for Foreign Subsidiary Companies in India<\/a><\/li>\n<li><a href=\"https:\/\/www.caindelhiindia.com\/blog\/company-registration-of-online-sellers\/\">Company Registration of online sellers<\/a><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Procedure for Issue of Bonus shares under Companies Act BONUS SHARES MEANING Bonus Shares are additional shares issued by a firm with a share capital to its current shareholders without receiving any payment from those shareholders. Existing shareholders are offered free additional shares in proportion to their current holdings. The basic principle behind a bonus &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10008],"tags":[10037],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/19162"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=19162"}],"version-history":[{"count":5,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/19162\/revisions"}],"predecessor-version":[{"id":19183,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/19162\/revisions\/19183"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=19162"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=19162"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=19162"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}