Bonus issue - reserves
This query is : Resolved
24 May 2012
Pl tell
May BONUS SHARES issue be made out of following:
1. Revaluation Reserve
2. Capital Reserve
3. Securities Premium Account
4. General Reserve
5. Debenture redemption reserve account
6. Capital Redemption Reserve Account
or any other reserve
Are rules different for Private Co. / Unlisted Co./ Listed Co.
Thank u in anticiation.
May BONUS SHARES issue be made out of following:
1. Revaluation Reserve
2. Capital Reserve
3. Securities Premium Account
4. General Reserve
5. Debenture redemption reserve account
6. Capital Redemption Reserve Account
or any other reserve
Are rules different for Private Co. / Unlisted Co./ Listed Co.
Thank u in anticiation.
25 May 2012
Dear Shrey
please consider CHAPTER IX ( of companies act 1956 )for you reference
CHAPTER IX
BONUS ISSUE
Conditions for bonus issue.
92. Subject to the provisions of the Companies Act, 1956 or any other applicable law for the time
being in force, a listed issuer may issue bonus shares to its members if:
(a) it is authorised by its articles of association for issue of bonus shares, capitalisation of
reserves, etc.:
Provided that if there is no such provision in the articles of association, the issuer shall pass a
resolution at its general body meeting making provisions in the articles of associations for
capitalisation of reserve;
(b) it has not defaulted in payment of interest or principal in respect of fixed deposits or debt
securities issued by it;
(c) it has sufficient reason to believe that it has not defaulted in respect of the payment of
statutory dues of the employees such as contribution to provident fund, gratuity and bonus;
(d) the partly paid shares, if any outstanding on the date of allotment, are made fully paid up
Restriction on bonus issue.
93. (1) No issuer shall make a bonus issue of equity shares if it has outstanding fully or partly
convertible debt instruments at the time of making the bonus issue, unless it has made reservation of
equity shares of the same class in favour of the holders of such outstanding convertible debt
instruments in proportion to the convertible part thereof.
(2) The equity shares reserved for the holders of fully or partly convertible debt instruments shall
be issued at the time of conversion of such convertible debt instruments on the same terms or same
proportion on which the bonus shares were issued.
Bonus shares only against reserves, etc. if capitalised in cash.
94. (1) The bonus issue shall be made out of free reserves built out of the genuine profits or
securities premium collected in cash only and reserves created by revaluation of fixed assets shall
not be capitalised for the purpose of issuing bonus shares.
(2) Without prejudice to the provisions of sub-regulation (1), the bonus share shall not be issued in
lieu of dividend.
Completion of bonus issue.
95. (1) An issuer, announcing a bonus issue after the approval of its board of directors and not
requiring shareholders’ approval for capitalisation of profits or reserves for making the bonus issue,
shall implement the bonus issue within fifteen days from the date of approval of the issue by its
board of directors:
Provided that where the issuer is required to seek shareholders’ approval for capitalisation of
profits or reserves for making the bonus issue, the bonus issue shall be implemented within two
months from the date of the meeting of its board of directors wherein the decision to announce the
bonus issue was taken subject to shareholders’ approval.
(2) Once the decision to make a bonus issue is announced, the issue can not be withdrawn.
please consider CHAPTER IX ( of companies act 1956 )for you reference
CHAPTER IX
BONUS ISSUE
Conditions for bonus issue.
92. Subject to the provisions of the Companies Act, 1956 or any other applicable law for the time
being in force, a listed issuer may issue bonus shares to its members if:
(a) it is authorised by its articles of association for issue of bonus shares, capitalisation of
reserves, etc.:
Provided that if there is no such provision in the articles of association, the issuer shall pass a
resolution at its general body meeting making provisions in the articles of associations for
capitalisation of reserve;
(b) it has not defaulted in payment of interest or principal in respect of fixed deposits or debt
securities issued by it;
(c) it has sufficient reason to believe that it has not defaulted in respect of the payment of
statutory dues of the employees such as contribution to provident fund, gratuity and bonus;
(d) the partly paid shares, if any outstanding on the date of allotment, are made fully paid up
Restriction on bonus issue.
93. (1) No issuer shall make a bonus issue of equity shares if it has outstanding fully or partly
convertible debt instruments at the time of making the bonus issue, unless it has made reservation of
equity shares of the same class in favour of the holders of such outstanding convertible debt
instruments in proportion to the convertible part thereof.
(2) The equity shares reserved for the holders of fully or partly convertible debt instruments shall
be issued at the time of conversion of such convertible debt instruments on the same terms or same
proportion on which the bonus shares were issued.
Bonus shares only against reserves, etc. if capitalised in cash.
94. (1) The bonus issue shall be made out of free reserves built out of the genuine profits or
securities premium collected in cash only and reserves created by revaluation of fixed assets shall
not be capitalised for the purpose of issuing bonus shares.
(2) Without prejudice to the provisions of sub-regulation (1), the bonus share shall not be issued in
lieu of dividend.
Completion of bonus issue.
95. (1) An issuer, announcing a bonus issue after the approval of its board of directors and not
requiring shareholders’ approval for capitalisation of profits or reserves for making the bonus issue,
shall implement the bonus issue within fifteen days from the date of approval of the issue by its
board of directors:
Provided that where the issuer is required to seek shareholders’ approval for capitalisation of
profits or reserves for making the bonus issue, the bonus issue shall be implemented within two
months from the date of the meeting of its board of directors wherein the decision to announce the
bonus issue was taken subject to shareholders’ approval.
(2) Once the decision to make a bonus issue is announced, the issue can not be withdrawn.
25 May 2012
About your answer
1. Revaluation Reserve - Bonus shares is not issued from Revaluation reserve because it is resticted from Chapter IX
2. Capital Reserve - No Bonus Shares issued from capital Reserve
3.securities premium account - Issued from it , but only if securities premium collected in cash
4. general reserve - Only if profits from which genral reserve created is e genuine profits
5. Debenture Redemption reserve : not allowed
6. Capital Redemption Reserve :allowed only if it is in cash
1. Revaluation Reserve - Bonus shares is not issued from Revaluation reserve because it is resticted from Chapter IX
2. Capital Reserve - No Bonus Shares issued from capital Reserve
3.securities premium account - Issued from it , but only if securities premium collected in cash
4. general reserve - Only if profits from which genral reserve created is e genuine profits
5. Debenture Redemption reserve : not allowed
6. Capital Redemption Reserve :allowed only if it is in cash
25 May 2012
Hi shrey
hope this answer is useful for you
please inform me for any descripancy in my answer
Thanx & Regards
Vishwash Agarwal
Mob no 07666515328
Mail vishwashagarwal@ymail.com
hope this answer is useful for you
please inform me for any descripancy in my answer
Thanx & Regards
Vishwash Agarwal
Mob no 07666515328
Mail vishwashagarwal@ymail.com
25 May 2012
Hi shrey
hope this answer is useful for you
please inform me for any descripancy in my answer
Thanx & Regards
Vishwash Agarwal
Mob no 07666515328
Mail vishwashagarwal@ymail.com
hope this answer is useful for you
please inform me for any descripancy in my answer
Thanx & Regards
Vishwash Agarwal
Mob no 07666515328
Mail vishwashagarwal@ymail.com
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