Issue of Bonus Share

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harshit mehta

88 Points Joined September 2018

A co. Wants to issue bonus shares.
Free Reserve : 50cr
SPR:20cr
CRR: 50 cr.
Co.wants to issue 5cr bonus shares of 10each. And also co. Wants to not let the money out of pockets of the co. For that year (i.e. dividend or any other purpose) , so as law has not told us the priority of using money (#63 (1)) .. so can we stop the money to go out by using free reserves firstly? Or
#63 (3) would not let it happen for dividend?

Replies (1)

Shraddha Ojha

6 Points Joined October 2020

For capital portion arrangement i.e, Face Value of issue of bonus share you can use only free reserves and if you issue Bonus Share on Premium you can use both i.e, free reserves and security premium reserves.