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. Can t

As per Section 63(2)(e) of the Companies Act, 2013, no company shall capitalise its profits or reserves for the purpose of issuing fully paid-up bonus shares under sub-section (1), unless the partly paid-up shares, if any outstanding on the date of allotment, are made fully paid-up. So, in the given case, the company cannot issue bonus to shareholders because the shares are partly paid-up (₹6 paid up per share).