24 October 2011
PROVISION FOR DEPRECIATION IS MANADATORY REQUIREMENT FOR THE PAYMENT OF DIVIDEND & NOT FOR BONUS SHARES.
COMPANY CAN ISSUE BONUS SHARES SUBJECT TO CERTAIN CONDITIONS LIKE PARTLY PAID UP SAHRES MADE FULLY PAID UP ETC. BUT NO REQUIREMENT OF DEPRECIATION. THUS COMPANY CAN CAPITALIZE THE PERMISSIBLE PROFITS/RESERVES FOR BONUS ISSUE.
BUT ISSUE OF BONUS SHARES IN LIEU OF DIVIDEND IS NOT PERMISSIBLE .
REGARDS
SANJAY KUMAR SAREEN FACULTY OF COMMERCE STUDIES,PITAMPURA,DELHI contactus@focs.in
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