What SEBI guidelines are to be followed for issue of bonus shares?

What SEBI guidelines are to be followed for issue of bonus shares?


Securities and Exchange Board of India (SEBI) guidelines are to be followed for issue of bonus shares:-

No company shall, issue the shares by the way of bonus unless the benefits are extended to the shareholders.

1. The bonus issue is made out of free reserves built out of the profits or share premium collected in cash only.

2. The residual reserves after the proposed capitalization shall be at least 40% of the increased paid up.
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