Bonus Shares that are fully paid
Fully paid bonus shares are those that are distributed at no additional expense in proportion to the amount of stock held by investors.
Bonus Shares are being issued on the recommendation of the Board and been authorized in the general meeting of the company; … The partly paid-up shares, if any outstanding on the date of allotment, are made fully paid-up; 6. It complies with such conditions as may be prescribed.
A fully paid share means the purchaser has paid the total issue price of the share. For example, shares may be issued for $1 each, and a shareholder may purchase those shares for $1 each. The shareholder has no further obligation to pay money on that share.
Because issuing bonus shares increases the issued share capital of the company, the company is perceived as being bigger than it really is, making it more attractive to investors. In addition, increasing the number of outstanding shares decreases the stock price, making the stock more affordable for retail investors.
What does fully paid mean?
: paid for at full face value with no further money due from the stockholder.
The main reason for forfeiture is where a call payment has been requested by the company on unpaid (or partly paid) shares and the shareholder has failed to pay the amount due.
IMPORTANT GUIDELINES BEFORE ISSUE OF BONUS SHARES: –
The bonus shares shall not be issued in lieu of dividend. The partly paid-up shares, if any outstanding on the date of allotment, shall be made fully paid-up before such issue.
It is the amount of share capital issued by a company that is subscribed but the company has not received entire nominal (face) value of the share.
Issue of bonus shares must be permitted by the Articles of Association of the Company. … Company has not defaulted in payment of statutory dues of employees such as, contribution to provident fund, gratuity and bonus. Any outstanding partly paid up shares shall be made fully paid up.
Normally, shares issued are fully paid.
Partially paid shares have the same rights as fully paid shareholders, including:
- Right to dividend payments.
- Right to vote at shareholders’ meetings.
- Right to participate upon winding up of the company.
Once shares have been forfeited, generally, the shareholder loses all rights under them and if the share was partly paid, has no right to recover the amount already paid to the company. The forfeited shares are then deemed to be owned by the company from the date agreed by the directors.
Paid-up share capital is the aggregate amount of money received from shareholders for shares issued. Hence, the capital allotted and paid by shareholders is called paid-up capital. This shows the amount received either in cash or in kind by the company from the allottees of shares subscribed by them.