As per the provisions of Section 63 of Companies Act, 2013
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(1) A company may issue fully paid-up
bonus shares to its members, in any manner whatsoever, out of—
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:
account:
Provided that no issue of bonus shares
shall be made by capitalising reserves created by the revaluation of assets.
shall be made by capitalising reserves created by the revaluation of assets.
(2) No company shall capitalise its
profits or reserves for the purpose of issuing fully paid-up bonus shares under
sub-section (1), unless—
profits or reserves for the purpose of issuing fully paid-up bonus shares under
sub-section (1), unless—
(a) it is
authorised by its articles;
authorised by its articles;
(b) it has, on
the recommendation of the Board, been authorised in the general meeting of the
company;
the recommendation of the Board, been authorised in the general meeting of the
company;
(c) it has not
defaulted in payment of interest or principal in respect of fixed deposits or debt
securities issued by it;
defaulted in payment of interest or principal in respect of fixed deposits or debt
securities issued by it;
(d) it has not
defaulted in respect of the payment of statutory dues of the employees, such
as, contribution to provident fund, gratuity and bonus;
defaulted in respect of the payment of statutory dues of the employees, such
as, contribution to provident fund, gratuity and bonus;
(e) the partly
paid-up shares, if any outstanding on the date of allotment, are made fully paid-up;
paid-up shares, if any outstanding on the date of allotment, are made fully paid-up;
(f) it complies with such conditions as may be prescribed.
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(3)
The bonus shares shall not be issued in lieu of dividend.
The bonus shares shall not be issued in lieu of dividend.
Procedure for Issue of Bonus Shares
1. Check whether the Article of Association
authorizes issue of bonus share. If not, then amend the Articles of Association
of the company by passing the Special Resolution.
authorizes issue of bonus share. If not, then amend the Articles of Association
of the company by passing the Special Resolution.
2. Check whether the Bonus issue results in
increase of authorized capital. If so, make necessary alterations in the
Memorandum/Articles of Association by passing special Resolution.
increase of authorized capital. If so, make necessary alterations in the
Memorandum/Articles of Association by passing special Resolution.
3. Hold the Board Meeting and get the following
proposal to be approved by the Board:
proposal to be approved by the Board:
·
To Pass Board
Resolution for issue of shares.
To Pass Board
Resolution for issue of shares.
·
To Decide the Ration
of Shares offering to share holders.
To Decide the Ration
of Shares offering to share holders.
·
To Fix the date, time,
and venue of the general meeting and to authorize to send the notice for the
same to the members.
To Fix the date, time,
and venue of the general meeting and to authorize to send the notice for the
same to the members.
4. File e-form- MGT-14 with in 30 days of Passing
of Board Resolution for issue of bonus shares
of Board Resolution for issue of bonus shares
5. Ensure that bonus issue has been made out of
free reserves built out of the genuine profits or securities premium or capital
redemption reserve account.
free reserves built out of the genuine profits or securities premium or capital
redemption reserve account.
6. Ensure that reserves created by revaluation of
assets are not capitalized.
assets are not capitalized.
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7. Ensure that the company has not defaulted in
payment of interest or principal in respect of fixed deposits and or debt
securities issued by it or in respect of the payment of statutory dues of the
employees such as contribution to provident fund, gratuity, bonus etc.
payment of interest or principal in respect of fixed deposits and or debt
securities issued by it or in respect of the payment of statutory dues of the
employees such as contribution to provident fund, gratuity, bonus etc.
8. Ensure that the bonus issue is not made in
lieu of dividend.
lieu of dividend.
9. The company which has once announced the
decision of its Board recommending a bonus issue shall not subsequently
withdraw the same.
decision of its Board recommending a bonus issue shall not subsequently
withdraw the same.
10. If there are any partly paid-up shares, ensure
that these are made fully paid-up before the bonus issue is recommended by
the Board of directors.
that these are made fully paid-up before the bonus issue is recommended by
the Board of directors.
11. Hold the general meeting and get the
resolution/s for issue of bonus shares passed by the members.
resolution/s for issue of bonus shares passed by the members.
12. Within 30 days of allotment of bonus shares file
with the registrar the Return of allotment in Form PAS-3 along with fee as specified
in companies (registration of offices and fees), Rules 2014.
with the registrar the Return of allotment in Form PAS-3 along with fee as specified
in companies (registration of offices and fees), Rules 2014.
13. All share certificates shall be delivered to
the shareholders within two months from the date of allotment of bonus
issue as required under section 56 (4).
the shareholders within two months from the date of allotment of bonus
issue as required under section 56 (4).
14. Intimate the details of allotment of shares to
the Depository immediately on allotment of such shares.
the Depository immediately on allotment of such shares.
15. In case of listed companies, the conditions
prescribed under listing agreement and chapter IX of SEBI (ICDR)
Regulation 2009 is to be complied with.
prescribed under listing agreement and chapter IX of SEBI (ICDR)
Regulation 2009 is to be complied with.