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      Question

      Which type of share is issued by a company to its

      existing shareholders without receipt of any consideration from shareholders for issuance of such share?
      A ESOP Correct Answer Incorrect Answer
      B Right shares Correct Answer Incorrect Answer
      C Bonus Shares Correct Answer Incorrect Answer
      D Preference Shares Correct Answer Incorrect Answer
      E Sweat Equity Shares Correct Answer Incorrect Answer

      Solution

      The issuance of bonus shares is governed by  Section 63 of the Companies Act, 2013 .   Nature of Issuance:  Bonus shares are  additional , fully paid-up shares given to existing shareholders for  free  (without any cash consideration). They are issued in proportion to the shares already held by the shareholder (e.g., a 1:1 bonus issue means one free share for every one share held).  

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