Kindly provide me the detail for the below mentioned query with proper section and rules:-
Example Year 2008 Share capital = 100 shares Dividend = Rs 1 per share so total Rs 100
year 2009 Issue of bonus share = 1:1 Bonus share = 100 Total share capital = 100+100=200 Shares Dividend for the year 2009 = ?
My query is that is it necessary that if a company issue bonus share then it should maintain the same rate of dividend on the share capital arised after issue of bonus share ( 200 shares ) Should Dividend for the year 2009 must be Rs. 100 ( since it was before issue of bonus share in 2008 ) or it can be less than rs 100 or it must be rs 200 or more (200 shares * Rs 1 per share ) Is there any boundation on rate of dividend after issue of bonus shares, Can it be lower than earlier year or may not be paid. Please provide view as soon as possible with the particular section and rules.
24 July 2012
The dividend is depend on the fact that whether it is declared before the date of Bonus Issue of after the date.
The Company can use same Book Closure for the both issues as well and give Bonus and Dividend both to the existing shareholders i.e. 100
The Company may decide any rate of dividend it does not relate with the Bonus issue.
Bonus issue is the Capitalization of the earlier years profit and Dividend is the distribution of Current year profit.
Best way is to first declare dividend as it is the ordinary business and has to be taken first and then as special business declare the bonus shares use the same Book Closure for both.
In this case the Dividend would be 100 and the Bonus would be 100
CAclubindia
