This article throws light upon the four main guidelines for the issue of bonus shares. The guidelines are: 1. Conditions for Bonus Issue 2. Restriction on Bonus Issue 3. Bonus Shares only against Reserves, etc. if Capitalised in Cash 4. Completion of Bonus Issue. Guideline # 1. Conditions for Bonus Issue: Subject to the provisions of the Companies Act, 1956 [...]
If the shareholder, who is offered right shares, does not want to purchase further shares, he can renounce or sell his rights within the specified period. As, generally, the rights shares are offered to the existing shareholders at a price lower than the market price of shares, the right to purchase these shares is valuable. The value of the rights [...]
After reading this article you will learn about:- 1. Meaning of Bonus Issue 2. Effects of Bonus Issue 3. Advantages 4. Disadvantages. Meaning of Bonus Issue: A company can pay bonus to its shareholders either in cash or in the form of shares. Many a times, a company is not in a position to pay bonus in cash inspite of [...]