Bonus issue & stock split

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SUMIT KUMAR KESHAN

CA FINALIST

31 Points Joined November 2009

"VERY URGENT"

Hi to all

my query is

can we do stock/share split as well as declare bonus shares as in the same accounting year.

can the resolution be passed in a single/same meeting. what will be the explanatory statement for the same.

our's is a private limited company

in our case the authorised capital of the company is Rs. 5000000/- divided into 500000 shares of Rs. 10/- each and the paid-up capital is Rs. 2000000/- divided into 200000 shares of Rs. 10/- each.

The management of the company wants to frist split the existing shares of the face value Rs. 10 per share into Rs. 1/- per share and then declare a bonus 1:1 on the existing shares.

so i want to know is it valid to do the same at the same time and if it is so what is the procedure for the same.

what are the steps to be followed.

Replies (2)

CS Rajveer Rai, Gurgaon

646 Points Joined January 2010

no it is not possible as by changing of face value your capital structure will change for which you have to file form 5 and after its approval you can issue bonus shares as per decided ratio.

SUMIT KUMAR KESHAN

CA FINALIST

31 Points Joined November 2009

DEAR

RAJVEER

CAPITAL STRUCTURE WILL CHANGE FOR SURE BY STOCK SPLIT BUT THE TOTAL PAID-UP CAPITAL WILL REMAIN THE SAME I.E RS. 2000000/- AND SIMULTANEOUSLY IF WE DECLEARE BONUS SHARE OF RS. 1 FACE VALUE IN THE RATIO 1:1 THAN WHAT WILL BE THE IMPLICATIONS.

I WANT TO KNOW THAT IS IT POSSIBLE IN A SINGLE MEETING (AGM/EGM).

AND WHAT CAN WE WRITE IN THE EXPLANATORY STATEMENT.

AND WHAT MAY BE THE ADDITIONAL REQUIREMENTS TO BE ADHERED TO.

REGARDS

SUMIT KESHAN