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Draft of Board Resolution for recommending Bonus Issue

Issue of bonus shares, on the recommendation of the Board, must be authorised in the general meeting of the company. Here is a format of Board resolution for the issue of bonus shares-

Board resolution for bonus issue of shares

 

CERTIFIED TRUE COPY OF THE RESOLUTION PASSED AT THE MEETING OF THE BOARD OF DIRECTORS OF PQR  LIMITED DULY CONVENED AND HELD ON WEDNESDAY, ……DATE………. AT THE REGISTERED OFFICE OF THE COMPANY AT ………REGISTERED OFFICE…………………………….

The Chairman informed the members present that as the Company is getting many new projects and that Company has achieved a decent profit during the financial year 2020-21. The Board of Directors recommends issuing bonus share of ………………No. ………. equity shares to be distributed among the existing shareholders of the company. Thus board of Directors is hereby proposing to seek the approval of the shareholders at the Extra  Ordinary General Meeting to be held on ……………date……..Thereafter a brief discussion on the subject matter took place and the following resolution was passed.

RESOLVED THAT in pursuant to the provisions of section 63 and other applicable provisions, if any, of the Companies Act, 2013 read with Rule 14 of the Companies (Share Capital and Debentures) Rules, 2014 (including any statutory modification or re-enactment thereof for the time being in force), and subject to the articles of association and such other approvals, consents, permissions as may be necessary, Board of Directors be and is hereby proposing to capitalize the sum of Rs. ………………….. /- out of the reserves of the Company for the purpose of issue  bonus shares to the existing shareholders of the Company in the proportion   of 1:2 i.e.( 1 (One) equity shares of nominal value Rs. 100/- each for every 2 ( two ) equity shares of nominal value of Rs. 100/-)

“RESOLVED FURTHER THAT the Board of Directors confirm with reference to the issue of bonus shares that:

  • The existing equity shares of the company are fully paid up.
  • The Bonus shares have not been issued in lieu of Dividend.
  • The Company is authorized by the article to issue the bonus shares, as being proposed in the resolution.
  • There is no default in repayment of deposits, interest payment thereon to any financial institution or banks.
  • The Bonus shares shall not be issued out of any reserves created of revaluation of assets.
  • The Company has not defaulted in respect to payment of statutory dues of the employees.”

“RESOLVED FURTHER THAT  the draft resolution for issue of Bonus shares have been placed before the members of Board for their approval, which shall be further circulated along with the notice to the members for their approval.”

“RESOLVED FURTHER THAT  the Extra Ordinary General Meeting of the Members of Company be convened on Tuesday, …date……….. at the Registered Office of the company to pass the above-mentioned Resolution and to get an approval of the members of the Company.”

RESOLVED FURTHER THAT the draft notice of Extra-Ordinary General Meeting as placed before the Board together with the explanatory statement thereto be and is hereby approved.”

RESOLVED FURTHER THAT Mr………….. Director of the Company be and is hereby authorized on behalf of the Company to file the necessary E -Form MGT-14 with the Registrar of Companies and to do all such acts,  deeds, matters, and things as deem necessary or expedient to give effect to the above resolution”.

 

//Certified True Copy//

PQR Limited

Director

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TaxGyata Team

TaxGyata Team