📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

    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).  

    Practice Next
    More Administrative Interpretation and Maxims Questions
    ask-question