Justify the following statement.To issue Bonus shares a company has to

1.	Justify the following statement.To issue Bonus shares a company has to fulfil certain provisions.
Answer» Bonus shares are fully paid shares issued free of cost to the existing equity shareholders. According to Companies Act 2013, every company has to follow certain provisions to issue Bonus Shares. Following are the provisions related to Bonus Issue: A company can issue Bonus shares only out of Free reserves or Securities Premium Account Capital Redemption Reserve Account A company cannot issue Bonus Shares only out of Reserves credited by the Revaluation of Assets. It also cannot issue Bonus Shares instead of paying dividends. Once the announcement for Bonus Shares is made by the Board of Directors, it cannot be then withdrawn. Bonus shares are fully paid up shares. Shareholders cannot renounce i.e., give away their Bonus Shares to another person. There is no minimum subscription to be collected

Justify the following statement.To issue Bonus shares a company has to fulfil certain provisions.

Answer»

Bonus shares are fully paid shares issued free of cost to the existing equity shareholders.
According to Companies Act 2013, every company has to follow certain provisions to issue Bonus Shares.

Following are the provisions related to Bonus Issue:

A company can issue Bonus shares only out of
Free reserves or
Securities Premium Account
Capital Redemption Reserve Account
A company cannot issue Bonus Shares only out of Reserves credited by the Revaluation of Assets.
It also cannot issue Bonus Shares instead of paying dividends.
Once the announcement for Bonus Shares is made by the Board of Directors, it cannot be then withdrawn.
Bonus shares are fully paid up shares.
Shareholders cannot renounce i.e., give away their Bonus Shares to another person.
There is no minimum subscription to be collected