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distribution of profits

FATEMA (CHARTERED ACCOUNTANT) (719 Points)

15 January 2010

What are the various means by which profits can be distributed to foreign equity share holders apart from dividend?

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3 Replies

Amir (Learner) (4016 Points)
Replied 15 January 2010

Dear Fatema,

1) Bonus Shares is the First & foremost thing (cash outflow is not involved on part of the company but shareholders can definately realize cash by selling their bonus shares& one more plus point CDT can be saved in this case)

2) U can issue Bonus Debentures etc, on which regular Interest can be paid to them.

If I get to know anyother means I will surely let u know

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FATEMA (CHARTERED ACCOUNTANT) (719 Points)
Replied 15 January 2010

Amir,

Will you please explain how does allotment of bonus shares amount to distribution of profits?

Amir (Learner) (4016 Points)
Replied 15 January 2010

Dear Fatema,

Bonus Shares will be issued by debiting ur reserves..& As I explained it will not involve any cash outflow on part of the company but shareholder's can definately realize cash by selling of their bonus shares in the market.