Bonus Shares - Law Dictionary Search Results
Home Dictionary Name: bonus sharesBonus shares
Bonus shares, bonus share is an accretion. A bonus share is issued when the company capitalises its profits by transferring an amount equal to the face value of the share from its reserve to the nominal capital. In other words the undistributed profit of the company is retained by the company under the head of capital against the issue of further shares to its shareholders. Bonus shares have, therefore, been described as a distribution of capitalised undivided profit, Standard Chartered Bank v. Custodian, (2000) 6 SCC 427: AIR 2000 SC 1488 (1499). [Companies Act, 1956 Sch I, Table A, Rr. 96 (97)]...
Be capitalised and distributed
Be capitalised and distributed, The expression 'be capitalised and distributed' in the resolution means 'is hereby capitalised and distributed'. In fact the whole tenor of the resolution shows that the distribution of the bonus shares became effective as from 30th Dec., 1954. If the ordinary shareholders became the owners of the bonus shares on and after Jan. 1, 1955 or on some later date, Shri Gopal Paper Mills v. CIT, (1971) 1 SCR 323: (1970) 2 SCC 80 (85): AIR 1970 SC 1750....
Capitalisation
Capitalisation, the profits of a Company can be capitalised in accordance with the Articles of Association and the law. On the capitalisation of the profits they cease to be profits in the hands of the Company. The nature of the asset is changed although it does not make any difference in the total assets of the Company. But profits stands transmuted and transformed into capital. The most common example of capitalisation of profits is by issuance of bonus shares to the shareholders, P.K. Badiani v. C.I.T., AIR 1977 SC 560 (565): (1976) 4 SCC 502....
Dealing with the company
Dealing with the company, a shareholder receiving bonus shares from the company is 'a person dealing with the company', EIC Services Ltd. v. Phipps, (2003) 1 WLR 2360. [Companies Act, 1985, s. 35A(1)]...
Profit bonus
Profit bonus, a profit bonus is strictly not wages, at least not for the purpose of computing liability to income-tax; it is not an expense in the ordinary sense of the term, incurred for the purpose of earning profits. A fortiorari profits have already been made. It is more like sharing of profits on the basis of a certain formula, CIT v. Swadeshi Cotton and Flour Mills (P) Ltd., AIR 1964 SC 1766 (1769). [Income-tax Act, 1961, s. 36(i)(ii)]...
Company
Company [fr. compagnia, Ital., which word is still printed on Bank of England notes as 'compa'], a body of persons associated for purposes of busi-ness, sometimes, but not now so frequently as some years ago, styled a Joint Stock Company.A company has its origin either (1) in a charter, as the Bank of England and many insurance companies; or (2) in a special Act of Parliament, with which, as authorizing an undertaking of a public nature such as a railway, the Companies Clauses Consolidation Act, 1845 (8 & 9 Vict. c. 16), is necessarily incorporated; or (3) in registration under the Companies Acts, 1862 and subsequent Acts, now consolidated into the (English) Companies Act, 1925 (19 & 20 Geo. 5, c. 23).By s. 13 of the Act of 1925 (1) on the registration of the memorandum of a company the registrar shall certify under his hand that the company is incorporated and, in the case of a limited company, that the company is limited. (2) From the date of incorporation mentioned in the certificat...
Capital
Capital [fr. Capitalis; caput, Lat.]. The corpus of property of any description which may or may not be the source of a periodical or other return (fructus, produce or income). The word 'capital' when employed in Company Law is used in different senses. Nominal capital is the capital of a company so stated for the purposes of division into shares. It implies nothing more than that the company is possessed of money or assets of a stated value at the company's own valuation which may be, and often is, exaggerated or illusory. Working capital means the amount employable for the purposes of a company or any other undertaking or business. See ALTERATION OF CAPITAL, COMPANY, PROSPECTUS, DIRECTORS. In the Settled Land Act, 1925, capital money arising under the Act means capital money arising under the powers or provisions of that Act or Acts which it replaces, receivable for the purposes of a settlement and includes securities representing capital money. Elaborate provisions are contained in ...
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