Fill in the blank: Bonus shares can only be issued if authorized by the company's articles, recommended by the Board, and approved in the ___.

General meeting

True or False: Bonus shares can be issued as a substitute for dividends.

False. Bonus shares cannot be issued in lieu of dividends; they serve a different purpose.

What must a company do if its paid-up capital exceeds its authorized capital after a bonus issue?

The company must pass a resolution in its general body meeting to increase the authorized capital.

Calculate the number of bonus shares a shareholder would receive if they hold 8,000 shares and a bonus issue is announced at a ratio of 1:4.

The shareholder would receive 2,000 bonus shares, calculated as (8,000 shares / 4 x 1).

Fill in the blank: The company should not have defaulted in payment of interest or principal on fixed deposits or debt securities on the date of ___.

Allotment

What is the effect of a rights issue on existing shareholders’ ownership?

A rights issue allows existing shareholders to maintain their proportional ownership by offering them the right to purchase new shares.

True or False: The value of a right is calculated as the difference between cum-right value and ex-right value.

True. The value of a right is indeed calculated as the difference between the cum-right and ex-right values.

What happens to shares that are not accepted during a rights issue?

Unaccepted shares are managed carefully.

• Shares may be sold later.

• Board seeks to minimize loss.

• Protects shareholder interests.

What are the conditions under which a company can issue bonus shares according to Section 63 of the Companies Act, 2013?

Conditions for Issuing Bonus Shares

• Authorized by company articles.

• Recommended by the Board.

• Approved in a general meeting.