A company has a share capital of 5,00,000 equity shares of ₹10 each, ₹6 paid up per share. It has a balance in the Reserve Fund Account amounting to ₹50,00,000. The company has decided to pay bonus to shareholders. As a

Checklist for Bonus issue (Section 63 of Companies Act, 2013) Check whether it is authorised by its articles; Whether it has, on the recommendation of the Board, been authorised in the general meeting of the company; Whether the company has defaulted in payment of interest or principal in respect of fixed deposits or debt securities issued by it; Whether it has defaulted in respect of the payment of statutory dues of the employees, such as, contribution to provident fund, gratuity and bonus; Whether the partly paid-up shares, if any outstanding on the date of allotment, are made fully paid-up; Whether the bonus is declared only out of: Free reserves Securities Premium Account Capital Redemption Reserve Account and not out of revaluation reserve created out of revaluation of assets Ensure that the company which has once announced the decision of its Board recommending a bonus issue does not subsequently withdraw the same; Check whether Return of allotment is filed with the registrar in Form PAS.3.