Bonus Shares
Issue bonus shares to existing shareholders by capitalising free reserves or securities premium account — Section 63 compliance, board and shareholder resolutions, and PAS-3 filing with MCA.
Issue bonus shares to your shareholders
Share the proposed ratio and reserves position. We handle the resolution, bonus share allotment and PAS-3 filing.
Talk to a CS →A complete bonus shares package
Reserves Verification
Confirmation that sufficient free reserves, securities premium or capital redemption reserve exists for capitalisation.
Board & Special Resolution
Board recommendation and shareholder special resolution for bonus issue — specifying ratio and source of funds.
Auditor Certificate
Auditor's certificate confirming that the bonus issue complies with Section 63 and applicable rules.
PAS-3 Filing
Return of Allotment filed with ROC within 30 days of allotment of bonus shares.
Share Certificates
New share certificates or updated demat account credits issued to all eligible shareholders.
Register of Members Update
Register of Members updated to reflect increased shareholding post bonus issue.
What is needed for bonus shares
Sufficient Free Reserves Required
Bonus shares can only be issued if the company has sufficient free reserves, securities premium or capital redemption reserve.
Special Resolution Mandatory
A special resolution of shareholders is required for a bonus issue under Section 63 — board resolution alone is not sufficient.
No Cash Dividend in Same Year
A company that has defaulted on payment of statutory dues cannot issue bonus shares — all dividends and dues must be current.
Bonus Shares Fully Paid
All bonus shares must be fully paid-up — no partly paid bonus shares can be issued.
PAS-3 Within 30 Days
PAS-3 must be filed within 30 days of allotment of bonus shares.
No Monetisation of Bonus
Bonus shares cannot be issued in lieu of dividend — they are a capitalisation of reserves, not a cash payment alternative.
Bonus shares can only be issued out of genuine free reserves — not borrowed funds or revaluation reserves. Using revaluation reserves for bonus issue is specifically prohibited under Section 63(1). We verify the reserves position and confirm the eligible source before the special resolution is passed.
Common issues with bonus shares
Simple steps, no surprises
Reserves verified
Free reserves, securities premium and capital redemption reserve checked — eligible amount confirmed.
Board recommendation and EGM
Board recommends bonus ratio — EGM special resolution passed — auditor certificate obtained.
Bonus shares allotted
Shares allotted pro-rata to all existing shareholders — demat credits or physical certificates issued.
PAS-3 filed
Return of Allotment filed within 30 days — Register of Members updated to reflect new shareholding.
Other services you may need
Frequently asked questions
Bonus shares are additional shares issued to existing shareholders free of cost by capitalising the company's accumulated free reserves, securities premium account or capital redemption reserve. They increase the paid-up share capital without any fresh cash inflow.
Bonus shares can be issued from free reserves, securities premium account and capital redemption reserve. Revaluation reserves specifically cannot be used for a bonus issue under Section 63(1) of the Companies Act 2013.
Yes. A special resolution of shareholders is mandatory for issuing bonus shares. The resolution must specify the bonus ratio (e.g., 1:1 or 2:1), the source of funds and confirm that all existing shares are fully paid-up.
No. If the company has any partly paid-up shares outstanding, bonus shares cannot be issued until all existing shares are fully paid-up. The partly paid shares must be fully called up and paid before the bonus issue.
Form PAS-3 (Return of Allotment) must be filed with the ROC within 30 days of the date of allotment of bonus shares.
Ready to issue bonus shares to your shareholders?
We verify reserves, obtain shareholder approval and file PAS-3 — fully Section 63 compliant.