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    Question

      A company may issue fully paid-up bonus shares to its

    members out of _______________
    A Free reserves Correct Answer Incorrect Answer
    B Securities premium account Correct Answer Incorrect Answer
    C Capital redemption reserve account Correct Answer Incorrect Answer
    D Either a b or c Correct Answer Incorrect Answer
    E Either b or c Correct Answer Incorrect Answer

    Solution

    Section 63. Issue of bonus shares: (1) A company may issue fully paid-up bonus shares to its members, in any manner whatsoever, out of— (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.

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