Issue of bonus shares out of securities premium account

Sai,

Your Company can issue bonus shares out of the securities premium account even it have accumulated losses.

Following cases, a company cannot issue bonus shares;

1. Not authorized by its articles of association.

2. Has defaulted in payment of interest or principal in respect of fixed deposits or debt securities issued by it.

3. Has defaulted in respect of the payment of staturory dues of the employees, such as, contribution to provident fund, gratuity and bonus;

Originally posted by : saiakhil
	Hi, I have a query relating to companies Act 2013, I want to issue bonus shares out of securities premium account as per section 63 of companies Act 2013. If i am having accumulated losses in my book at the time of issue of bonus shares. Is there any conditions that it should not issue by continuing those accumulated losses?

CONDITIONS FOR ISSUE OF BONUS SHARES

• Articles must contain provision for issue of bonus shares [As per Section-62(2) (a)].
• Bonus issue must be authorised by the members of the company (by passing of Ordinary Resolution) on recommendation of Board.
• Company should not have defaulted in payment of interest or principal in respect of fixed deposits or debt securities issued by it and no defaulted in respect of the payment of statutory dues of the employees, such as, contribution to provident fund, gratuity and bonus.