Issue of Bonus Shares

Section-63
Issue of Bonus Shares
(i) free reserves;
Resources
(ii) the securities premium account; or
Section-63 (1)
(iii) the capital redemption reserve account:
(a) it is authorised by its articles;

(b) it has, on the recommendation of the Board, been authorised in the general
meeting of the company;

(c) it has not defaulted in payment of interest or principal in respect of fixed

Pre-eligibility
deposits or debt securities issued by it;
Section-63 (2)
(d) it has not defaulted in respect of the payment of statutory dues of the
employees, such as, contribution to provident fund, gratuity and bonus;

(e) the partly paid-up shares, if any outstanding on the date of allotment, are
made fully paid-up;
Section-63 (3) 3) The bonus shares shall not be issued in lieu of dividend.

PROCEDURE FOR ISSUE OF BONUS SHARES

STEP-I Call the Board Meeting

STEP-II File MGT-14:

File e-form- MGT-14 with in 30 days of Passing of Board Resolution for issue of shares.
STEP- III Convene A General Meeting
STEP-IV Call the Board Meeting And Pass Board Resolution for allotment of shares.
STEP-V File e-form PAS-3 with in 30 days of passing of Board Resolution for allotment of shares
STEP-VI Issue Of Share certificate Within 2 Months Of Allotment Of Shares
CONDITIONS FOR ISSUE OF BONUS SHARES

1. Articles must contain provision for issue of bonus shares

2. Bonus issue must be authorised by the members of the company
3. Company should not have defaulted in payment of interest or principal in respect of fixed
deposits or debt securities issued by it and no defaulted in respect of the payment of statutory
dues of the employees, such as, contribution to provident fund, gratuity and bonus.
4. Check whether Authorized capital is sufficient for issue of Bonus Shares.
5. Check availability of resources for issue of Bonus shares
6. Check Quantum of Bonus shares.
7. Check is there any partly paid up share on the date of allotment.