CMA SIVAKUMAR A,ACMA.
Quick Summary
Through this article, I intend to summarize relevant provisions relating to Bonus Shares and Right Issue as per the Companies Act 2013 and its latest Amendments. Issue of bonus shares Sec 63 1. A company can issue fully paid-up bonus shares to its members, in any manner whatsoever, out of-
Daily Limit Reached
You have reached your daily limit of 2 Free Articles
Subscribe to CCI PRO for unlimited access
Why Upgrade to CCI PRO?
- No Ads
- WhatsApp Broadcasts
- Daily E-Newsletter
- Unlimited Articles Access
BEST VALUE
2 YEAR PLAN
3,499
(Inclusive of GST)
1 YEAR PLAN
1,999
(Inclusive of GST)
View all CCI PRO benfits
Already a PRO member? Login here for an ad-free experience.
FAQ :
A company can issue fully paid bonus shares from its free reserves, the securities premium account, or the capital redemption reserve account. However, reserves created by revaluing assets cannot be used.
Before issuing bonus shares, a company must be authorised by its articles, have shareholder approval in a general meeting, not be in default of interest or principal payments on fixed deposits or debt securities, and not have defaulted on statutory dues for employees. Additionally, any partly paid shares must be made fully paid-up.
No, bonus shares cannot be issued in lieu of dividends.
When a company proposes to increase its subscribed capital, it must offer further shares to existing equity shareholders in proportion to their current paid-up share capital. This is done via a letter of offer specifying the number of shares and a time limit for acceptance.
The time limit for accepting a right share offer must be between fifteen and thirty days from the date of the offer, unless the company's articles specify otherwise.
Yes, unless the company's articles state otherwise, shareholders have the right to renounce the shares offered to them in favour of another person.
CAclubindia
