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CHAPTER IV

CHAPTER IV. BONUS SHARES (Section63). ISSUE OF BONUS SHARES:. ISSUE FULLY PAID-UP BONUS SHARES OUT OF- Free reserves Securities premium account Capital redemption reserve account CANT BE made out of Capitalizing Revaluation Reserves (created by revaluation of assets.)

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CHAPTER IV

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  1. CHAPTER IV BONUS SHARES (Section63)

  2. ISSUE OF BONUS SHARES: • ISSUE FULLY PAID-UP BONUS SHARES OUT OF- • Free reserves • Securities premium account • Capital redemption reserve account • CANT BE made out of Capitalizing Revaluation Reserves (created by revaluation of assets.) • The bonus shares shall NOT be issued in lieu of dividend.

  3. Issue by capitalizing company’s profits or reserves IS ALLOWED, IF : • Bonus Issue is authorized by Articles of Association. • Recommended by the Board of Directors & approved in the general meeting of the company • Company has not defaulted in payment of interest or principal in respect of fixed deposits or debt securities issued by it • Company has not defaulted in respect of the payment of statutory dues of the employees (e.g. contribution to provident fund, gratuity and bonus) • After making partly paid-up shares (if any, outstanding on the date of allotment) as fully paid-up • After complying with such conditions as may be prescribed.

  4. CHECKLIST FOR ISSUE OF BONUS SHARES: • Check availability of resources for issue of Bonus shares. • Check eligibility of the company for issuing bonus shares like provision in AOA, no default in payment of dues, no partly paid up shares etc. • Check whether the authorized capital is sufficient for issue of bonus shares • Decided on the quantum of issue

  5. Convene Board Meeting to seek Board’s approval and fix the time, date and place for holding general meeting for seeking member’s approval. • Convene general meeting and seek member’s approval. • Convene Board meeting and make allotment of shares • File return of allotment with Registrar of Companies within 30 days of making allotment in FORM PAS - 3. • Issue share certificates, update registers and minutes book

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