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Question
Justify the following statement.
To Issue Bonus Shares, a company has to fulfill certain provisions.
Solution
Justification:
The following provisions company has to fulfill to issue Bonus Shares:
- A company can issue Bonus Shares only out
of:
- Free reserves or
- Securities Premium Account or
- Capital Redemption Reserve Account - A company cannot issue Bonus Shares only out of reserves created by the Revaluation of Assets.
- The company also cannot issue Bonus Shares instead of paying a dividend.
- Once the announcement for Bonus Shares is made by the Board of Directors then it cannot be withdrawn.
- Bonus shares are fully paid up shares. Shareholders cannot give away their Bonus shares to another person.
- There is no minimum subscription to be collected.
Thus, it is rightly justified that, to issue bonus shares, a company has to fulfill certain provisions. - ESOS is offered by a company to its Permanent employees, Directors, and Officers.
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| Group 'A' |
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c) Price of shares mentioned in prospectus |
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7. Offered to existing Equity shareholders |
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8. Transfer of shares |
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9. Fixed price issue method |
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10. Allotment of shares |
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| Group 'A' |
Group 'B' |
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a) Issued capital |
1) Non-payment of calls |
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b) FPO |
2) Any issue after IPO |
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c) Bonus shares |
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e) Forfeiture of shares |
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7) Free shares issued to existing equity shareholders |
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8) Maximum capital a company can raise |
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9) Allotment Letter |
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10) Operation of law |
Find the odd one.
Find the odd one.
Complete the sentence.
Shares issued free of cost to existing Equity shareholders is called as ______
Answer in one sentence.
With whom should the prospectus be filed before issuing it to the public?
Explain the following term/concept.
Bonus shares
Justify the following statement.
Company has to fulfill certain provisions while making Right Issue.
Justify the following statement.
ESOS is offered by a company to its permanent employees, Directors and Officers
Match the pairs.
| Group A | Group B |
| a) Debenture holders | 1) Secured deposits |
| b) IPO | 2) Owners |
| c) Charge on assets | 3) Any issue after first-time public offer |
| d) SEBI | 4) To protect the interest of investors in securities market |
| e) Issued within two months of allotment of shares | 5) First-time public offer |
| 6) Allotment letter | |
| 7) To protect the interest of companies in securities market | |
| 8) Share certificate | |
| 9) Creditors | |
| 10) Unsecured deposits |
