Issue of Bonus Share by companies to its members



Quick Summary
Companies can issue bonus shares to members using their free reserves, securities premium account, or capital redemption reserve. However, reserves from asset revaluation cannot be used. Before issuing, companies must ensure their Articles of Association permit it, have board and member approval, and have no defaults in payments like interest, principal, or statutory employee dues. Once the board recommends a bonus issue, it cannot be withdrawn.

Bonus issue under section 63 of Companies Act, 2013 read with rule 14 of companies (Share capital and Debentures) Rules, 2014 A company may issue fully paid bonus shares to its members out of: Free Reserves ; Security Premium Account or Capital Redemption Reserves: However, no issue of bonus shares by capitalizing reserves created by the revaluation of assets. Prior Conditions Before Issuing Bonus Shares Authorised by AOA; Recommended by Board and approved by mem
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1999
(Excl. of GST ₹359)

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