Bonus issue: Issue of Capital and Securities

Checklist: Issue of Capital and Securities: Bonus issue (section 63)

• Check whether the Bonus issue is authorized by its companies articles of association (AOA);

1. Check the issue is authorized in the annual general meeting of the company on the recommendation of the Board of Directors ;
2. Check companies’ defaulted in payment of interest or principal in respect of fixed deposits or debt securities issued by it along with the nature of default;
3. The company who plans for issuing must not default in respect of the payment of statutory dues of the employees, such as, contribution to provident fund, gratuity and bonus are not eligible for Bonus Issue;
4. On the Date of Bonus Issue partly all paid-up equity shares of the company must be fully paid up;
5. Whether the bonus is declared only out of
   • Free reserves
   • Securities Premium Account
   • Capital Redemption Reserve Account and not out of revaluation reserve created out of Revaluation of assets
6. Company ones announce the issue of shares on the recommendation of the Board of Directors must not withdrawn Ones should check it before the bonus issue;
7. Check whether Return of allotment is filed with the registrar in Form PAS.3 Indicative list of documents to be checked:

• Articles of Association
• Minutes of Board Meeting
• Minutes of General meeting
• Register of fixed deposits
• Auditor’s Report
• PAS-3

Learn more about registration of the company and issue of shares from setyourbiz