Table of Contents
Provision for Issuance of Bonus Shares under Companies Act, 2013
Section 63. (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:
Conditions for issuing Bonus Shares:
1. It is to be authorised by the AOA
2. It has on recommendation of the
Board and authorised in General Meeting
3. It has not defaulted in payment of
Interest or principal in respect of fixed deposits or debt securities issued by
company
4. It has not defaulted in respect of
the payment of statutory dues for the employees such as contribution to pf,
gratuity and bonus
5. The partly paid-up share, if any
are to be made fully paid up
Procedural Part: Bonus Issue
1. Check enabling provisions of AOA
2. Ensure no defaults in payment of
interest/principal w.r.t. fixed deposit, debt securities, statutory dues etc.
3. Board Meeting to approve Bonus
Issue
4. General Meeting for approval of
the shareholders for Bonus Issue
5. Board Meeting for Allotment of
Bonus Shares
6. Filing ROC form for allotment
(PAS-3)
7. Issue of Share Certificates