Bonus shares

I have read your query several times but could not understand the same.  Call money is paid by the shareholder whereas bonus shares are issued by the company.  How bonus shares can be issued in lieu of call money is not clear.

Divya,

As per section 63 (2) (e) of the Companies Act, 2013. No company shall capitalize its profits or reserves for the purpose of issuing fully paid up bonus shares unless " the partly paid-up shares, if any outstanding on the date of allotment, are made fully paid- up.

Originally posted by : P C Agrawal
	I have read your query several times but could not understand the same.  Call money is paid by the shareholder whereas bonus shares are issued by the company.  How bonus shares can be issued in lieu of call money is not clear.

kindly refer to the question again.. I have edited it 

Dear Divy,

Please refer to Section 63 of the Companies Act, 2013.

(1) A company may issue fully paid-up bonus shares to its members, in any manner whatsoever, out of—

(i) its free reserves;

(ii) the securities premium account; or

(iii) the capital redemption reserve account:

Thus bonus shares to be issued by a company cannot be partly paid. Bonus shares are issued by company fully paid.

If there are any partly paid shares outstanding at the time of allotment of bonus shares then as per Section 63 (2)(e), such partly paid have to be first made fully paid and then only bonus shares can be allotted.

Thanks

Dipali Shinde