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bonus issue


Bhaskar Marathi   25 March 2019

Bhaskar Marathi

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under chapter Bonus issue.. Can "Capital reserve" utilise for issue of bonus shares...? CA inter level.. please suggest the answer...

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Giridhar S Karandikar (Team Lead)     25 March 2019

Giridhar S Karandikar
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yes it can be utilized provided they are genuine profits credited to capital reserve

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Shivam RC (Student)     27 March 2019

Shivam RC
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As per the Provision of Section 63 of the Companies Act 2013 :

A company may issue fully paid-up bonus shares to its members out of

[i] its free reserves;

[ii] the securities premium account; or

[iii] the capital redemption reserve account:

Provided that no issue of bonus shares shall be made by capitalising reserves created by the revaluation of assets ( Revaluation Reserve ).

Hence, Capital Reserve cannot be utilised for issuing fully paid up Bonus Shares.

Regards.

avater

Bhaskar Marathi   27 March 2019

Bhaskar Marathi

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if capital reserve realised in cash.. can I utilise it.?

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Giridhar S Karandikar (Team Lead)     27 March 2019

Giridhar S Karandikar
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yes you can utilize it


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