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Bonus shares u/s 63

14 April 2018

Bonus shares shall not be issued in lieu of dividend? But actual intension of company is still not to issue dividend ...is it true? please explain

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6 Replies

CA Naveen Chand (Chartered Accountant) (12729 Points)
Replied 14 April 2018

can't be issued in lieu of dividend

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mayank verma (65 Points)
Replied 14 April 2018

but if a company issues bonus shares,company usually avoid dividend payment..is this not called lieu of dividend indirectly?

ashu sharma (11 Points)
Replied 15 April 2018

In lieu of dividend generally means In exchange of a proposed dividend

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Priti Manyal (19 Points)
Replied 16 April 2018

Cannot issue bonus shares in lieu of dividend means once dividend is declared by board and agreed by the members in a general meeting, bonus shares cannot be issued instead of actually paying out dividend. Payment or dividend or issuance of bonus shares both depend on a Company's strategy and it's resources at a given point of time.

2 Like

Vinayak Mishra (192 Points)
Replied 14 April 2018

There is a difference between act, tacts,and facts. Bonus shares cannot be issued. in lieu of dividend but tactics used by the companies not to declare dividend or nominal dividend when issue bonus shares. Compliances of law in letters but guilty intention. It's also true that sometimes there are good reasons behind issuance of bonus shares. Thanks and regards