Tuesday, July 8, 2008

SEBI And Govt. Guidelines for issue of bonus shares

Q:- What are main SEBI And Govt. Guidelines for issue of bonus shares ?

Ans. There are the following main guidelines for issue of bonus shares :-

  1. Provision in article of association
  2. Maximum amount calculate after apply following test

i) Residual reserve test

ii) Profitability test

iii) Maximum limit test

3. Source of bonus shares

4.Bonus in liew dividend is not allowed

5. Accounting treatment

6.Increase in authorised capital

7.Certificate of compliance

8.Reserve from revaluation of assets not use for bonus shares .

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