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Bonus share meaning is an extra number of shares that are provided by the business to its current shareholders as a “BONUS” when the firm is not in a position to pay a dividend to its shareholders despite producing excellent earnings for that quarter. Bonus shares are also known as “bonus” shares.

Only a corporation that has generated a significant amount of profit or has amassed a considerable amount of free reserves that cannot be used for any one specific purpose and may be dispersed as dividends has the authority to issue bonus shares to its owners.

On the other hand, these bonus shares are distributed to the shareholders in proportion to the position they already own in the firm.

1. What Is The Date When The Record Was Made? –

The corporation will determine the cutoff date for those who are qualified to receive bonus shares, and that date will be the record date. On the record date, the firm will determine which shareholders are qualified to receive bonus shares from the company, and those shareholders must have shares in their Demat account.

2. What Exactly Is An “Ex-Date”? –

The record date is calculated forward one day from the ex-date. In this scenario, a prospective investor must purchase the shares at least one day before the ex-date to be eligible for the bonus shares.

. The Following Is A Breakdown Of The Two Distinct Varieties Of Bonus Shares:

1. Bonus Shares That Have Been Fully Paid For

2. Bonus Shares That Have Been Partially Paid For

. Bonus Shares That Are Completely Paid For –

Fully paid bonus shares are shares that are awarded to investors in the proportion that they own in the firm at no additional expense. 

The following are examples of possible sources for the issuance of certain kinds of bonus shares:

1) A statement of profits and losses 2) Capital reserves 3) Reserves for the redemption of capital 4) A paid premium account for security

. Bonus Shares That Are Only Partially Paid For –

Let’s start with the basics and figure out what a partly-paid share is before they go on to party-paid-up bonus shares.

A partially paid share is a share in a corporation that has only had a portion of the entire issue price paid for it as of the current date. This indicates that the investor does not have to pay the full issue price to purchase partially paid shares.

On the other hand, the remaining balance for shares that have only been partially paid might be paid in installments whenever the firm makes calls.

Therefore, the term “partially-paid up bonus shares” refers to the situation in which the bonus is applied to the partly-paid shares, and then those shares are converted into fully-paid shares without the uncalled amount being called out via profit capitalization.

conclusion –

 To qualify for the various forms of how to open demat account online shares offered by the firm, you are required to hold shares of the company in a Demat account.