Checklist for Issue of Bonus Shares u/s 63 of Companies Act 2013

Procedural Checklist for Issue of Bonus Shares

Section 63 of the Companies Act 2013 contains provision for issue of Bonus Shares.

Bonus Shares can be issued on:

(i) its free reserves

(ii) the securities premium account; or

(iii) the capital redemption reserve account:

Provided that no issue of bonus shares shall be made by capitalising reserves created by the revaluation of assets.

• Call Board Meeting. Issue Notice of Board Meeting at least 7days before the meeting.
• Convene Board Meeting. Quorum should 1/3^rd of the Board at least. Decide the ratio of bonus shares to be issued. Pass Board Resolution for issue of shares. Fix date and time EOGM. Issue Notice to Every Shareholder.
• Convene EOGM. Approve issue of Bonus Shares and Pass Special resolution.
• File MGT-14 within 30 days from the date of passing the special resolution for issue of Bonus Shares.
• Call Board Meeting for allotment of share. Issue Notice of Board Meeting at least 7days before the meeting.
• Hold Board Meeting. Pass Board Resolution for allotment of shares.
• File Return of Allotment in Form PAS-3. Along with Board Resolution of allotment and list of allotees within 30 days from the date of allotment.
• Issue allotment letter and share certificates within 2 months of allotment.

Formats Required for Issue of Bonus Shares u/s 63 of the Companies Act 2013

1. Format of Notice Of Board Meeting For Issue Of Bonus Shares And Calling EOGM

NOTICE

Notice is hereby given that an urgent meeting of Board of Directors of ABC Private Limited is scheduled to be held on [DATE] at 10.00 A.M. at its registered office ……………………………………………., to consider various matters including the following matter:

• Discuss Scheme of Bonus Issue of Equity Shares
• Fix date and time EOGM

For ABC (P) Ltd.

Director

[NAME]

DIN:

Place:

Dated:

2. Format of Resolution For Board Meeting For Issue Of Bonus Shares And Calling EOGM

CERTIFIED COPY OF RESOLUTION PASSED IN THE BOARD MEETING OF DIRECTORS OF ABC PRIVATE LIMITEDHELD ON [DATE] AT ………………………………………… AT 10:00 A.M.

“RESOLVED THAT in pursuance of Section 63 of the Companies Act, 2013 read with The Companies (Share Capital and Debenture) Rules, 2014 the approval of the Board be and is hereby accorded to the Company to issue ……………………………….. equity shares of Rs. ………../- each as bonus shares (hereinafter referred to as new shares) of an aggregate nominal value of Rs. ……………………………………/- (Rupees IN WORDS), as bonus shares to the shareholders out of the Securities Premium Account and in the interest of all concerned, such issue to be made on the following terms and conditions:-

• The issue of shares will be made in the proportion of …………………. new shares for every one equity share held on today on the meeting date i.e., ………………………….
• The Equity Shares so issued shall upon allotment have the same rights of voting as the existing equity shares and be treated for all other purposes pari-passu with the existing equity shares of the Company and that the equity shares so allotted during the financial year shall be entitled to dividend, if any, proportionately in the year of the allotment of these shares.
• Share Certificates shall be issued to those to whom the new shares are allotted within the time prescribed in the Companies Act, 2013.

“FURTHER RESOLVED THAT to give effect to above resolution an Extra-Ordinary General Meeting of the members is hereby called on [DATE] at 10.00 a.m. at the registered office of the company at a shorter notice. The consent of all the shareholders has been received. The Notice of the Extra-Ordinary General Meeting is hereby approved.”

RESOLVED FURTHER THAT the Board of Directors be and is hereby authorize to take all steps to implement the above resolutions, finalize and take all actions in connections with the bonus issue and allotment of shares to the members and others where applicable”.

Certified true copy

For ABC (P) Ltd.

Director

[NAME]

DIN:

3. Format of Notice of EOGM For Issue Of Bonus Shares

NOTICE

Notice is hereby given that the Extra – Ordinary General Meeting of the members of ABC Private Limited will be held on [DATE] at the registered office of the company AT………………………………. at 10.00 a.m. to transact the following business:

SPECIAL BUSINESS

Item No. 1

To consider and, if thought fit, to pass, with or without modification, the following resolution as an Special Resolution:

TO CONSIDER ISSUE OF BONUS EQUITY SHARES

“RESOLVED THAT in pursuance of Section 63 of the Companies Act, 2013 read with The Companies (Share Capital and Debenture) Rules, 2014 and on the recommendation of the Board, the approval of the members be and is hereby accorded to the Company to capitalize a sum of Rs. ………………………./- out of Rs…………………………/- standing to the credit of Securities Premium Account and to apply this sum of Rs. …………………………/- for paying in full at par ………………………… equity shares of Rs. …………………/- each in the capital of the company to be allotted and distributed as fully paid bonus shares to the holders of equity shares of Rs. …………………………/- each in the Company, whose names appear in the Register of Members of the Company on the date of allotment, in the ratio of 1:1 i.e., 1 shares of Rs. ……………./- for every one equity share held and that such new equity Shares so issued shall upon allotment have the same rights of voting as the existing equity shares and be treated for all other purposes pari-passu with the existing equity shares of the Company and that the equity shares so allotted during the financial year shall be entitled to dividend, if any, proportionately in the year of the allotment of these shares.

RESOLVED FURTHER THAT the Board of Directors be and is hereby authorize to take all steps to implement the above resolutions, finalize and take all actions in connections with the bonus issue and allotment of shares to the members and others where applicable”.

By Order of the Board of Directors

For ABC (P) Ltd.

Director

[NAME]

DIN:

Place:

Dated:

EXPLANATORY STATEMENT PURSUANT TO SECTION 102 (1) OF THE COMPANIES ACT 2013

As required by sub section 1 of Section 102 of the Companies Act, 2013, the following explanatory statement set out all the material facts relating to Item No. 1 of the accompanying Notice dated [DATE].

Item No. 1

The Board of Directors recommended to capitalize a sum of Rs. 19800000/- out of Rs. 49980000/- standing to the credit of Securities Premium Account and to apply this sum of Rs. …………………………/- for paying in full at par ………………………… equity shares of Rs. …………../- each in the capital of the company in the ratio of 1:1 i.e., 1 shares of Rs. ………………/- for every one equity share held by members.

Now, consent of the members is required for issue of Bonus Shares. Accordingly, the Members are requested to consider the special resolutions favourably.

The Board recommend the Resolution set out in the Notice for the approval of the Members.

No Director, Manager, other key managerial personnel and relatives of the same are concerned or interested in the passing of this Resolution.

By Order of the Board of Directors

For ABC (P) Ltd.

Director

[NAME]

DIN:

Place:

Dated:

4. Format of Resolution For EOGM For Issue of Bonus Shares

EXTRACTS OF THE MINUTES OF THE EXTRA – ORDINARY GENERAL MEETING OF THE MEMBERS OF ABC PRIVATE LIMITED HELD ON [DATE] AT ………………………………….. AT 10:00 A.M.

ISSUE OF BONUS EQUITY SHARES

“RESOLVED THAT in pursuance of Section 63 of the Companies Act, 2013 read with The Companies (Share Capital and Debenture) Rules, 2014 and on the recommendation of the Board, the approval of the members be and is hereby accorded to the Company to capitalize a sum of Rs. …………………………./- out of Rs. …………………………./- standing to the credit of Securities Premium Account and to apply this sum of Rs. …………………………./- for paying in full at par …………………………. equity shares of Rs. …………/- each in the capital of the company to be allotted and distributed as fully paid bonus shares to the holders of equity shares of Rs. ………../- each in the Company, whose names appear in the Register of Members of the Company on the date of allotment, in the ratio of 1:1 i.e., 1 shares of Rs. ………/- for every one equity share held and that such new equity Shares so issued shall upon allotment have the same rights of voting as the existing equity shares and be treated for all other purposes pari-passu with the existing equity shares of the Company and that the equity shares so allotted during the financial year shall be entitled to dividend, if any, proportionately in the year of the allotment of these shares.

RESOLVED FURTHER THAT the Board of Directors be and is hereby authorize to take all steps to implement the above resolutions, finalize and take all actions in connections with the bonus issue and allotment of shares to the members and others where applicable”.

Certified true copy

For ABC (P) Ltd.

Director

[NAME]

DIN:

5. Format Of Board Resolution For Allotment Of Bonus Shares

CERTIFIED COPY OF RESOLUTION PASSED IN THE BOARD MEETING OF DIRECTORS OF ABC PRIVATE LIMITED HELD ON [DATE] AT ………………………………………………..AT [TIME].

“RESOLVED THAT in terms of authority given to the Board by the Articles of Association of the Company and pursuant to the issue of bonus shares to the members of the company, the consent of the board be and is hereby accorded to allot and distribute 19800000 equity shares each having a nominal value of Rs. …………………./-( Rupees IN WORD) at a price of Rs. …………/- (Rupees IN WORDS) per share at par as fully paid bonus shares to the holders of equity shares of Rs. ……../- each in the Company, whose names appear in the Register of Members of the Company on the date of allotment, in the ratio of 1:1 as per the details given below:

RESOLVED FURTHER THAT, a letter of allotment in relation to the above equity shares issued and allotted as aforesaid be issued to the allottees by the Company.

RESOLVED FURTHER THAT the Directors of the Company be and are hereby severally authorized to do all such acts, deeds and things as may be required to be done to give effect to the above resolution, including issuance of duly stamped share certificates in relation to the above equity shares issued and allotted as aforesaid to name of shareholder in accordance with the provisions of the Companies Act, 2013 and rules made there under and the Articles of Association of the Company and do all other acts consequent to the issuance and allotment, and give such directions as may be required, necessary, expedient or desirable for giving effect to the aforesaid resolutions.”

RESOLVED FURTHER THAT the share certificates be issued under the Common Seal of the Company in the prescribed format as per Companies Act 2013.

Certified true copy

For ABC (P) Ltd.

Director

[NAME]

DIN:

6. Format Of List Of Allotees

Annexure A: Format of the list of allotees (separate list to be provided for each allotment)

Table A

Table B

For ABC (P) Ltd.

Director

[NAME]

DIN: