Issue of bonus share for a private limited

Co Act 2013 177 views 2 replies

Businessman

23 Points Joined March 2016

Hi Experts,

We have a Private Limited company with Authorised Capital of 50 Lacs and Paid up Capital of 10 Lacs

Share holding patterns is 1,00,00 Shares of Rs 10 each divided equally between the two Promoters.

Each holding 50,000 share of Rs 10 Each.

The reserve ans surplus of the company is Rs 40 Lacs.

Can we issue bonus share of 4:1 and convert the Reserves into Share Capital?

Does it attract Dividend Distribution tax or any other tax?

Please share your views

Thanks in Advance

Replies (2)

155 Points Joined January 2019

bonus shares are not taxable in the hand of company.

1234 Points Joined August 2017

you can issue bonus shares to capitalize your reserves provided

1.its authorized in the AOA

2. you have passed a special resolution

3. there is no default in repayment of loans, dues, and payment of statutory dues

4. only full paid shares can be issued as a bonus shares

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