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bonus share
my Pvt company has huge reserve and surplus in balance sheet. whether issue of bonus share can I used such reserve and surplus for issue of bonus share ?
Replies (5)
Issue of bonus shares is covered under Section 63 of the Companies Act, 2013 read with rule 14 of The Companies (Share Capital and Debentures) Rules, 2014.
Source for issue of Bonus Shares:
As per Section- 63(1) a company may issue fully paid up bonus shares to its members out of following:
A. Free reserves.
B. Securities Premium Account.
C. Capital Redemption Reserve Account.
Source from which Bonus Shares can’t issue:
A. No issue of bonus shares shall be made capitalizing reserves created by the revaluation of assets. (Company can’t issue Bonus Shares out of reserve create from revaluation of assets).
B. The Company shall not issue shares in lieu of Dividend.
Source for issue of Bonus Shares:
As per Section- 63(1) a company may issue fully paid up bonus shares to its members out of following:
A. Free reserves.
B. Securities Premium Account.
C. Capital Redemption Reserve Account.
Source from which Bonus Shares can’t issue:
A. No issue of bonus shares shall be made capitalizing reserves created by the revaluation of assets. (Company can’t issue Bonus Shares out of reserve create from revaluation of assets).
B. The Company shall not issue shares in lieu of Dividend.
no revaluation reserve from the company, only accumulated profits
Free reserve includes accumulated reserve. free reserves includes
Free Reserve includes following items
Profit and loss accounts
General Reserve
Reserve funds
contingency reserve
Dividend equalization reserve
Workmen compensation fund
workmen accident fund
Free Reserve includes following items
Profit and loss accounts
General Reserve
Reserve funds
contingency reserve
Dividend equalization reserve
Workmen compensation fund
workmen accident fund
yes your company can do
ok sir I understand the free reserve items thanks
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