Bonus Issue of Shares
Corporate Compliance
Bonus Issue of Shares
A bonus issue is when a company gives free extra shares to its existing shareholders. In short, it rewards members by converting reserves into share capital. However, it must follow the Articles and a clear allotment process. Therefore, Prospect Legal handles the full bonus issue for you. As a result, your members get their bonus shares cleanly and lawfully.
Free
Shares to Members
Reserves
Capitalised
PAS-3
Allotment Filing
End-to-End
Resolution to Allotment
Reward Your Shareholders
What is a bonus issue, and why make one?
A bonus issue gives existing shareholders extra shares at no cost. Simply put, the company turns its free reserves into new share capital. Therefore, members hold more shares for the same investment. Above all, it must follow the rules in your Articles and the Companies Act.
Companies issue bonus shares for clear reasons. First, they reward loyal shareholders without paying cash. Next, a bonus issue can improve market perception. Also, it uses reserves productively. Because it needs proper approval and filing, expert handling matters.
Documents required for a bonus issue
You need only a few papers to start. Also, our team checks each one before filing. As a result, the issue goes through cleanly. Here is the full list:
- Articles of Association permitting bonus issue
- The board and members’ resolutions
- The latest audited financial statements
- Details of free reserves available
- The proposed bonus ratio and share list
- A signed authority letting us file for you
How a bonus issue works — step by step
The process is simple when an expert guides you. Moreover, Prospect Legal handles every step on your behalf. Here is how it works:
Step 1 — Check reserves and Articles
First, we confirm your AOA allows a bonus issue and reserves are enough. Because this decides feasibility, it comes first.
Step 2 — Pass the resolutions
Next, we prepare the board and members’ approvals with the bonus ratio. Therefore, the issue is properly authorised.
Step 3 — Allot the shares
Then, we allot the bonus shares to eligible members. In addition, we update the register of members.
Step 4 — File PAS-3
Finally, we file the PAS-3 return of allotment with the ROC. After that, the bonus issue is complete.
Why choose Prospect Legal for a bonus issue?
A bonus issue without proper backing can be challenged. However, correct handling keeps it valid. Here is what sets us apart:
- Reserve check. Because we confirm the reserves, your issue is well-backed.
- Correct ratio. Also, we set the bonus ratio within the rules.
- Proper resolutions. Next, we draft the board and member approvals right.
- Clean allotment. Moreover, we update the register and file PAS-3 on time.
- Real support. Above all, you can reach a human on call or WhatsApp anytime.
Bonus issue of shares — what’s included
| Service | What we do | Benefit to you |
|---|---|---|
| Feasibility Check | Review reserves and Articles | A valid issue |
| Resolutions | Draft board and member approvals | Proper authority |
| Bonus Ratio | Set the correct ratio | Fair allotment |
| Share Allotment | Allot to members | Updated holdings |
| Register Update | Refresh the member register | Accurate records |
| PAS-3 Filing | File the allotment return | A complete issue |
Related corporate compliance services
Share actions often pair with other filings. Therefore, explore these services next:
Frequently asked questions about bonus issue of shares
What is a bonus issue?
It is free extra shares given to existing shareholders. Also, the company funds it from reserves. Therefore, members gain more shares at no cost. We handle the whole process for you.
Do members pay for bonus shares?
No, bonus shares are issued free of cost. Also, they come from the company’s reserves. Therefore, members simply receive more shares. We keep the allotment clean.
What is Form PAS-3?
PAS-3 is the ROC return that records a share allotment. Also, it must be filed within the due window. Therefore, we file it on time. We share the receipt.
Is a bonus ratio fixed by us?
The board proposes a ratio, and members approve it. Also, it must stay within the rules. Therefore, we set it correctly. We keep it fair to all members.
How long does a bonus issue take?
It usually takes a week or two once approvals are ready. Also, the reserve check comes first. Therefore, early papers speed it up. We keep you posted.
Reward your shareholders with a bonus issue
Talk to Prospect Legal today. We handle the resolutions, allotment, and PAS-3 filing so your bonus issue is clean, fair, and fully compliant.
