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CS Executive · Capital Market and Securities Laws · Issue of Capital and Disclosure Requirements

Meera Foods Ltd has 1,00,000 equity shares, of which 20,000 are partly paid-up. It plans a bonus issue. Which statement is correct under section 63 of the Companies Act, 2013?

Partly paid-up shares outstanding on the date of allotment must be made fully paid-up before the bonus issue. Section 63(2)(e) of the Companies Act, 2013 makes this a condition, and bonus shares themselves must be fully paid-up and not issued in lieu of dividend.

  1. APartly paid shares outstanding on allotment date must be made fully paid-upCorrect
  2. BBonus shares may be issued as partly paid-up shares
  3. CPartly paid shares are ignored and may remain partly paid
  4. DBonus shares may be issued in lieu of dividend on partly paid shares

Explanation

Section 63(2)(e) requires that partly paid-up shares outstanding on the date of allotment are made fully paid-up. Section 63(1) speaks of fully paid-up bonus shares, and section 63(3) bars issue in lieu of dividend.

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