Go Ad-Free on CAclubindia with Daily Mobile Updates. Subscribe Now!

Bonus shares

Rocky ( ) (85 Points)

18 July 2015

Can bonus shares be issued for partly paid up equity shares ?

Also, can partly paid up bonus shares be made fully paid up by the company without calling money from shareholders assuming that final call has not yet been made

Reply
Follow
Share

4 Replies

P C Agrawal (Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad) (8229 Points)
Replied 18 July 2015

I have read your query several times but could not understand the same. Call money is paid by the shareholder whereas bonus shares are issued by the company. How bonus shares can be issued in lieu of call money is not clear.

Upgrade to CAclubindia Pro. Subscribe Now!

prakash (Company Secretary) (1352 Points)
Replied 19 July 2015

Divya,

As per section 63 (2) (e) of the Companies Act, 2013. No company shall capitalize its profits or reserves for the purpose of issuing fully paid up bonus shares unless " the partly paid-up shares, if any outstanding on the date of allotment, are made fully paid- up.

Rocky ( ) (85 Points)
Replied 19 July 2015

Originally posted by : P C Agrawal
	I have read your query several times but could not understand the same. Call money is paid by the shareholder whereas bonus shares are issued by the company. How bonus shares can be issued in lieu of call money is not clear.

kindly refer to the question again.. I have edited it

dipali shinde (company secretary) (163 Points)
Replied 21 July 2015

Dear Divy,

Please refer to Section 63 of the Companies Act, 2013.

(1) A company may issue fully paid-up bonus shares to its members, in any manner whatsoever, out of—

(i) its free reserves;

(ii) the securities premium account; or

(iii) the capital redemption reserve account:

Thus bonus shares to be issued by a company cannot be partly paid. Bonus shares are issued by company fully paid.

If there are any partly paid shares outstanding at the time of allotment of bonus shares then as per Section 63 (2)(e), such partly paid have to be first made fully paid and then only bonus shares can be allotted.

Thanks

Dipali Shinde