Bonus issue

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tadhagata

tadhagata (Querist)
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10 October 2013 can an unlisted issuer issue bonus?

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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11 October 2013 Yes. An unlisted company can also issue bonus shares.

Procedure for bonus issue by an unlisted company
1. At the Board meeting resolutions for the following purposes will be passed:

— To approve the proposal for the bonus issue

— To Approve the resolution to be passed at a general meeting

— To approve requisite resolution for increase of the capital and consequential alteration of the memorandum and the articles (if necessary)

— To decide on fixing a record date

2. A general meeting will be convened to pass necessary resolution/s.

3. Within 30 days of the general meeting, file the necessary returns in the prescribed forms e.g. e-Form Nos. 5, 23, etc. to the Registrar of Companies.

4. After the record date, prepare a list of members entitled to the bonus shares on the basis of the register of members as updated.

5. Convene Board meeting (or of a meeting of committee of directors) for the allotment of bonus shares and allot the bonus shares.

Under section 206A where any instrument of transfer of shares has been delivered to a company for registration and the transfer of such shares has not been registered by the company, it shall keep in abeyance issue of fully paid-up bonus shares in relation to such shares in pursuance of sub-section (3) of section 205.

6. File a return of allotment with the Registrar within 30 days of the allotment.

7. Prepare and dispatch the share certificates relating to the bonus shares allotted within three months of the date of allotment and make entries of the shares allotted in the register of members.

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