transfer to reserves, bonus issue

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Querist : Anonymous

Querist : Anonymous (Querist)

26 January 2010 sir,
our co was incorporated in 2005-06, earning profits every year, no dividend was ever declared or paid. now we want to make bonus issue. can we make bonus issue without ever giving dividends earlier. can we use 100% of the reserves to make bonus issue.urgent please.btw, ours is a pvt co.,

Ankur Garg

Ankur Garg (Expert)
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26 January 2010 Declaration of dividend is not a pre-condition for the issue of bonus shares.

According to me you can use entire reserves for the purpose of bonus issue.

Views of other experts solicited.

Regards

Rasesh

Rasesh (Expert)
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26 January 2010 Agree with expert. However, ensure that is no clause to the contrary in your Articles.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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26 January 2010 Where a company adopts Table A of the companies Act,1956 or where it has not so adopted but has an express provision in the AOA to allow capitalization of profits or where it has not excluded the specific clause of Table A as inapplicble in its otherwise independent AOA, capitalisation of profits is very well possible by issuing bonus shares.

Querist : Anonymous

Querist : Anonymous (Querist)

27 January 2010 thanks a lot!

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