Bonus issue rules require equitable treatment for convertible securities and capitalisation only from genuine free reserves with safeguards. Bonus share issuance must reserve proportionate shares for holders of convertible debentures to be issued on conversion on the same terms, and must be capitalised only from free reserves arising from genuine profits or share premium collected in cash; revaluation reserves are excluded. Bonus issues cannot substitute dividends, require partly-paid shares to be fully paid, preclude companies in default on deposits or debentures or with unresolved employee statutory dues, and mandate board approval, timely implementation, requisite amendments to articles, authorised capital increase if necessary, and a compliance certificate countersigned by the auditor or practising company secretary.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Bonus issue rules require equitable treatment for convertible securities and capitalisation only from genuine free reserves with safeguards.
Bonus share issuance must reserve proportionate shares for holders of convertible debentures to be issued on conversion on the same terms, and must be capitalised only from free reserves arising from genuine profits or share premium collected in cash; revaluation reserves are excluded. Bonus issues cannot substitute dividends, require partly-paid shares to be fully paid, preclude companies in default on deposits or debentures or with unresolved employee statutory dues, and mandate board approval, timely implementation, requisite amendments to articles, authorised capital increase if necessary, and a compliance certificate countersigned by the auditor or practising company secretary.
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