Form 23
This query is : Resolved
27 October 2012
whether Form 23 is necessary for ordinary resolution? (The resolution is for issuing bonus shares)
27 October 2012
Hi
Yes, if you are issuing bonus shares in accordance with articles. If article permit you can issue shares by passing special resolution.
Yes, if you are issuing bonus shares in accordance with articles. If article permit you can issue shares by passing special resolution.
27 October 2012
• PROCEDURAL STEPS FOR ISSUENCE OF BONUS SHARES
The Company proposes to issue of bonus shares by capitalization of profit has to comply the following procedures:
1. Ensure that there is a provision in the Articles permitting issue of bonus shares by capitalization of reserve, etc. If there is no such provision, alter them accordingly.
2. See that the expanded share capital after the issue of bonus share is within the authorized share capital of the company. Otherwise, complete the proceeding to increase the authorized share capital suitably. [Regulation 92 (a) of SEBI (ICDR) Regulation, 2009].
3. Ensure that there is no default in payment of interest or principal in respect of (i) fixed deposits; and (ii) interest on existing debentures or principal on redemption thereof. [Regulation 92 (b) of SEBI (ICDR) Regulation, 2009].
4. Ensure that there is no default in respect of the payment of statutory dues of the employees such as contribution to provident fund, gratuity, bonus etc. and that you have sufficient reason to believe so. [Regulation 92 (c) of SEBI (ICDR) Regulation, 2009].
5. In case the share capital of the company consists of any partly paid-up shares, make them fully paid-up before issue of bonus shares. [Regulation 92 (d) of SEBI (ICDR) Regulation, 2009].
6. Ensure that the bonus issue is not made within 12 months of your public issue or rights issue, if any.
7. Ensure strict compliance with the following financial parameters for determining the quantum of bonus issue;
(i) That the bonus issue is made out of free reserve built out of the genuine profits or share premium collected in cash only;
(ii) That reserves created by revaluation of fixed assets or without accrual of cash resources are not capitalized.
8. Convene a Board Meeting after giving notice to all directors of the company to consider the issue of bonus shares.
9. The Board of directors of the company at their meeting must consider the matter related to the availability of amount in current year profit and issuance of bonus shares.
10. It is advisable to get report of the auditors relating to the amount available for distribution as bonus shares to the members.
11. The Board should pass following necessary resolutions at their meeting:
a) Approval of the bonus issue subject to the approval in general meeting;
b) Approve the record date to determine the entitlement of bonus shares.
c) Approval of the notice for the AGM/EGM.
12. Send intimation of such proposal to the stock exchanges where the securities of the company are listed before and after the Board Meeting.
13. Note that the bonus issue should be made within a period of 6 months from the date of approval of the Board of Directors thereof and company has no option to change the decision.
14. General notice should be published about issue of bonus shares in at least one English Newspaper and one in principal language of the district/region in which the registered office of the is situate.
15. Issue of notice of closure of register of members in at least one English Newspaper and one in principal language of the district/region in which the registered office of the is situate. [Section 154]
16. Keep in mind that permission of RBI, if any, required under section 6 of FEMA 1999 should be obtain to allot bonus shares to Non-Resident shareholders.
17. Issue notice in writing at least 21 days before the date of the General Meeting with suitable explanatory statement.
18. Promptly forward to the stock exchanges six copies of notices sent to the shareholders one of them should be certified.
19. The stock exchanges should be given a notice of 21 days informing it about the closure of share transfer books and recording date.
20. Send copy of general notice published in news paper to the stock exchange promptly.
21. After the record date, a complete list of all members, who are entitled to receive bonus shares, is prepared.
22. Please note that as per Section 206A (b) of the Companies Act, 1956, if the instrument of transfer of shares has been delivered to the company but the same was not registered by it till the date of closure of register of members, the company should keep in abeyance the offer of bonus shares relating to shares involved in the transfer.
23. On the due date the company hold general meeting and pass the necessary resolution.
24. If the resolution passed in a Special Resolution, file the same with the ROC in e-Form-23 within 30 days. [Section 192].
25. Promptly forward to the stock exchanges copies of the proceeding of the general meeting.
26. Note that all notices and resolutions of the general meeting/board meeting relating to issue of bonus shares should be forwarded to the stock exchanges.
27. Apply to the stock exchanges for obtaining “In Principle Approval” for listing entitlement of bonus issue together with the provisional documents relating thereto. [Clause 24 (a) of the Listing Agreement].
The Company proposes to issue of bonus shares by capitalization of profit has to comply the following procedures:
1. Ensure that there is a provision in the Articles permitting issue of bonus shares by capitalization of reserve, etc. If there is no such provision, alter them accordingly.
2. See that the expanded share capital after the issue of bonus share is within the authorized share capital of the company. Otherwise, complete the proceeding to increase the authorized share capital suitably. [Regulation 92 (a) of SEBI (ICDR) Regulation, 2009].
3. Ensure that there is no default in payment of interest or principal in respect of (i) fixed deposits; and (ii) interest on existing debentures or principal on redemption thereof. [Regulation 92 (b) of SEBI (ICDR) Regulation, 2009].
4. Ensure that there is no default in respect of the payment of statutory dues of the employees such as contribution to provident fund, gratuity, bonus etc. and that you have sufficient reason to believe so. [Regulation 92 (c) of SEBI (ICDR) Regulation, 2009].
5. In case the share capital of the company consists of any partly paid-up shares, make them fully paid-up before issue of bonus shares. [Regulation 92 (d) of SEBI (ICDR) Regulation, 2009].
6. Ensure that the bonus issue is not made within 12 months of your public issue or rights issue, if any.
7. Ensure strict compliance with the following financial parameters for determining the quantum of bonus issue;
(i) That the bonus issue is made out of free reserve built out of the genuine profits or share premium collected in cash only;
(ii) That reserves created by revaluation of fixed assets or without accrual of cash resources are not capitalized.
8. Convene a Board Meeting after giving notice to all directors of the company to consider the issue of bonus shares.
9. The Board of directors of the company at their meeting must consider the matter related to the availability of amount in current year profit and issuance of bonus shares.
10. It is advisable to get report of the auditors relating to the amount available for distribution as bonus shares to the members.
11. The Board should pass following necessary resolutions at their meeting:
a) Approval of the bonus issue subject to the approval in general meeting;
b) Approve the record date to determine the entitlement of bonus shares.
c) Approval of the notice for the AGM/EGM.
12. Send intimation of such proposal to the stock exchanges where the securities of the company are listed before and after the Board Meeting.
13. Note that the bonus issue should be made within a period of 6 months from the date of approval of the Board of Directors thereof and company has no option to change the decision.
14. General notice should be published about issue of bonus shares in at least one English Newspaper and one in principal language of the district/region in which the registered office of the is situate.
15. Issue of notice of closure of register of members in at least one English Newspaper and one in principal language of the district/region in which the registered office of the is situate. [Section 154]
16. Keep in mind that permission of RBI, if any, required under section 6 of FEMA 1999 should be obtain to allot bonus shares to Non-Resident shareholders.
17. Issue notice in writing at least 21 days before the date of the General Meeting with suitable explanatory statement.
18. Promptly forward to the stock exchanges six copies of notices sent to the shareholders one of them should be certified.
19. The stock exchanges should be given a notice of 21 days informing it about the closure of share transfer books and recording date.
20. Send copy of general notice published in news paper to the stock exchange promptly.
21. After the record date, a complete list of all members, who are entitled to receive bonus shares, is prepared.
22. Please note that as per Section 206A (b) of the Companies Act, 1956, if the instrument of transfer of shares has been delivered to the company but the same was not registered by it till the date of closure of register of members, the company should keep in abeyance the offer of bonus shares relating to shares involved in the transfer.
23. On the due date the company hold general meeting and pass the necessary resolution.
24. If the resolution passed in a Special Resolution, file the same with the ROC in e-Form-23 within 30 days. [Section 192].
25. Promptly forward to the stock exchanges copies of the proceeding of the general meeting.
26. Note that all notices and resolutions of the general meeting/board meeting relating to issue of bonus shares should be forwarded to the stock exchanges.
27. Apply to the stock exchanges for obtaining “In Principle Approval” for listing entitlement of bonus issue together with the provisional documents relating thereto. [Clause 24 (a) of the Listing Agreement].
27 October 2012
ALLOTMENT OF BONUS SHARES
1. Convene a Board Meeting by giving notice to all the directors of your company and complete the proceeding regarding allotment of the bonus shares in the proportion and in the manner as mentioned in the resolution and as approved by the stock exchanges.
2. Promptly forward to stock exchanges copies of the proceeding of the Board meeting.
3. A return of allotment is filed in e-Form-2 with ROC within 30 days of the allotment being made.
4. Share Certificate are issued to the allottees in accordance with the Companies ( Issue of Share Certificate ) Rules, 1960 and give credit to the members through CDSL and/ or NSDL in case of having shares in the electronic mode.
5. Fraction of shares resilting on issue of bonus shares shall be dealt as decided in the general meeting. Usually, all fractions are collected and disposed of by the company in the market and realization on such disposal is distributed among the shareholders in the proportion of their entitlement.
6. Make suitable entries in the register of members.
7. In case of listed company, application shall be made to stock exchanges for final listing and permission for trading of bonus shares.
8. Submit a certificate to the SEBI of compliance of provisions of SEBI Bonus Issue Regulations duly signed by a company and counter signed by a statutory auditor or company secretary in practice.
ALLOTMENT OF BONUS SHARES
1. Convene a Board Meeting by giving notice to all the directors of your company and complete the proceeding regarding allotment of the bonus shares in the proportion and in the manner as mentioned in the resolution and as approved by the stock exchanges.
2. Promptly forward to stock exchanges copies of the proceeding of the Board meeting.
3. A return of allotment is filed in e-Form-2 with ROC within 30 days of the allotment being made.
4. Share Certificate are issued to the allottees in accordance with the Companies ( Issue of Share Certificate ) Rules, 1960 and give credit to the members through CDSL and/ or NSDL in case of having shares in the electronic mode.
5. Fraction of shares resilting on issue of bonus shares shall be dealt as decided in the general meeting. Usually, all fractions are collected and disposed of by the company in the market and realization on such disposal is distributed among the shareholders in the proportion of their entitlement.
6. Make suitable entries in the register of members.
7. In case of listed company, application shall be made to stock exchanges for final listing and permission for trading of bonus shares.
8. Submit a certificate to the SEBI of compliance of provisions of SEBI Bonus Issue Regulations duly signed by a company and counter signed by a statutory auditor or company secretary in practice.
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