Bonus shares

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Querist : Anonymous

Querist : Anonymous (Querist)

08 December 2011 How do we derive the ratio for the Issue of Bonus shares? Suppose if a company has paid up capital of Rs 51,60,000 & Reserves of Rs 35,20,000/- & it wants to capitalize its reserves & issue bonus shares. Then in what ratio will the shares be issued?

CS Ankur Srivastava

CS Ankur Srivastava (Expert)
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12 December 2011 Ratio is determined according to the availability of reserves. For an example in this case the company can issue bonus shares upto Rs. 35.20 lacs and it is to be given proportionately. so the ration would be 3:2.

Company can give 2 bonus shares on each 3 existing equity shares.

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