Dividend after issue of bonus shares

This query is : Resolved

CA CS Anurag Biyani (Querist)
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23 July 2012 Dear all

Kindly provide me the detail for the below mentioned query with proper section and rules:-

Example
Year 2008
Share capital = 100 shares
Dividend = Rs 1 per share so total Rs 100

year 2009
Issue of bonus share = 1:1
Bonus share = 100
Total share capital = 100+100=200 Shares
Dividend for the year 2009 = ?

My query is that is it necessary that if a company issue bonus share then it should maintain the same rate of dividend on the share capital arised after issue of bonus share ( 200 shares )
Should Dividend for the year 2009 must be Rs. 100 ( since it was before issue of bonus share in 2008 ) or it can be less than rs 100 or it must be rs 200 or more (200 shares * Rs 1 per share )
Is there any boundation on rate of dividend after issue of bonus shares, Can it be lower than earlier year or may not be paid.
Please provide view as soon as possible with the particular section and rules.

Thank in advance
waiting for replies

CS Ankur Srivastava

CS Ankur Srivastava (Expert)
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24 July 2012 The dividend is depend on the fact that whether it is declared before the date of Bonus Issue of after the date.

The Company can use same Book Closure for the both issues as well and give Bonus and Dividend both to the existing shareholders i.e. 100

The Company may decide any rate of dividend it does not relate with the Bonus issue.

Bonus issue is the Capitalization of the earlier years profit and Dividend is the distribution of Current year profit.

Best way is to first declare dividend as it is the ordinary business and has to be taken first and then as special business declare the bonus shares use the same Book Closure for both.

In this case the Dividend would be 100 and the Bonus would be 100

CA CS Anurag Biyani

CA CS Anurag Biyani (Querist)
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24 July 2012 Thank You Ankur g

My query is that: Do company require to maintain the same level of dividend after the bonus share issue.

In above case can company give rs 40 dividend (less than 100) to total 200 shares? Or it is require to give atleast rs. 100 dividend?

CS Ankur Srivastava

CS Ankur Srivastava (Expert)
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27 July 2012 It is not required to maintain the same level of dividend.

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