Page 131 - DCOM106_COMPANY_LAW

Company Law

Notes The declaration of bonus issue, in lieu of dividend, cannot be made.
The bonus issue is not made unless the partly-paid share, if any, existing, are made fully
paid up.

The company (a) has not defaulted in payment of interest or principal in respect of fixed
deposits, and interest on existing debentures or principal or redemption thereof, and
(b) has sufficient reason to believe that it has not defaulted in respect of the payment of
statutory dues of the employees such as contribution to provident fund, gratuity, bonus,
etc.
A company which announces its bonus issue after the approval of the BOD must implement
the proposals within a period of 6 months from the date of such approval and shall not
have the option of changing the decision.
There should be a provision in the articles of the company for capitalisation of reserves;
etc. and, if not, the company shall pass a resolution at its general body meeting making
provisions in its articles for capitalisation of reserves, etc.
Consequent to the issue of bonus shares if the subscribed and paid-up capital exceed the
authorised share capital, a resolution shall be passed by the company at its general body
meeting for increasing the authorised share capital.

No company shall, pending conversion of FCDs/PCDs, issue any shares by way of bonus,
unless similar benefit is extended to the holders of such FCDs/PCDs. Through reservation
of shares in proportion to such convertible part of FCDs/PCDs. The shares so reserved
may be issued at the time of conversion of such debentures on the same terms on which
the bonus issues were made.
Self Assessment

6. Consider the following functions of a stock exchange:
(i) Providing a ready market for securities
(ii) Helping capital formation
(iii) Regulating the capital structure of a company

(iv) Regulating the public deposits with companies
Of the above functions:
(a) (i), (ii), (iii) and (iv) are correct (b) (i), (ii), and (iii) are correct

(c) (i) and (ii) are correct (d) none is correct
7. Match List-I with List-II and select the correct answer using the codes given below the lists:
List-I List-II

A. Minimum issued capital for being listed 1. One crore
on a stock exchange
B. Exemption from the consent of controller 2. Three crores
of capital issues for issue of shares
C. Amount payable on shares to be called 3. Issued capital of less than 3
only in installments and not in one stroke crores
D. Listing in OTC exchange 4. Issued capital of 50 crores and
above

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