Bonus Issue

Corporate & Other Laws

What is reason to Issue Bonus Shares to a Shareholder. The company neither gets Consideration for it and the Nominal Value of per share reduces. What is the logic?

Rajasekaran Suresh

CA Inter

★ 495

23-Feb-23 20:09

501

Answers (4)

It is an incentive for the shareholders from the side of the company. It helps maintain shareholders loyalty towards company. Also, in case company has SURPLUS free reserves/Security premium/CRR, that can be capitalized.

CA YOGITA HARJANI

Faculty

23-Feb-23 20:49

To give shareholders one more reason to smile. It is often a part of investor relations policy of the company to issue bonus share, dividend etc so that they can satify the expectations of investors. It is more from investors POV rather than of company.

Himanshu Somani

CA Final

★ 97K+

23-Feb-23 20:55

The issue of bonus shares enhances the company's value and increases positions and image in the market, gaining the trust of existing shareholders and attracting several small investors to be a part of the stock market.

Varshaa M

CA Final

★ 35K+

23-Feb-23 21:03

This might help https://youtu.be/OESBOKyK_Io?t=655

CA Suraj Lakhotia

Admin

24-Feb-23 13:37