bonus issue

under chapter Bonus issue.. Can "Capital reserve" utilise for issue of bonus shares...? CA inter level.. please suggest the answer...
Replies (4)
yes it can be utilized provided they are genuine profits credited to capital reserve
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.
if capital reserve realised in cash.. can I utilise it.?
yes you can utilize it

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