Bonus Shares
Bonus Shares
Bonus shares are issued by a company to its existing shareholders free of cost by capitalising its reserves. It’s a way to reward shareholders and strengthen the company’s capital structure without bringing in new funds. Even though no money changes hands, issuing bonus shares requires strict compliance: approvals, filings, updated registers, and proper disclosures.
We help you plan and execute bonus share issuance smoothly and in full compliance with the Companies Act.
What we do
Check eligibility and availability of free reserves
Draft board and shareholder resolutions
Prepare bonus issue ratio and supporting calculations
Coordinate with auditors for certification
File PAS-3 with MCA after allotment
Update the Register of Members and share certificates
Handle disclosures and documentation required for audits or investor reviews
Why this matters
A bonus issue affects the company’s capital structure and shareholding pattern. Any error in ratio, reserves, or filings can lead to penalties, shareholding disputes, or delays during due diligence.
Frequently Asked Questions
Free shares issued to existing shareholders by converting the company’s accumulated profits or reserves into share capital.
No. Bonus shares are issued without any payment from shareholders.
Board and shareholder approval through an ordinary resolution.
PAS-3 after allotment of bonus shares.
No valuation is needed since shares are issued from free reserves, not subscription money.