Saving Mantra Blogs

Step-by-Step Process for Filing Bonus Return

Written by

Financial Analyst

in

When a company issues bonus shares to its shareholders, it must file a Bonus Return with the Registrar of Companies (ROC). This confirms that the shares were properly allotted and records the updated share capital.
Here is a simple guide to help you understand the entire process.

Step 1: Board Meeting Approval

The company holds a Board Meeting to:

  • Approve the bonus issue
  • Decide the bonus ratio (example: 1:2)
  • Confirm the source of funds (free reserves)

Nothing can start without Board approval.

Step 2: Shareholder Approval (If Needed)

Some companies may need shareholder approval through a General Meeting.
This depends on the Articles of Association or company type.

Step 3: Increase Authorised Share Capital (If Required)

If the bonus issue exceeds the current authorised capital:

  • A resolution is passed
  • Form SH-7 must be filed with ROC

Only then can bonus shares be issued.

Step 4: Allotment of Bonus Shares

Once approvals are complete, the company allots the bonus shares to all eligible shareholders based on the approved ratio.

Step 5: File Bonus Return — Form PAS-3

This is the main step.
The company must file Form PAS-3 (Return of Allotment) with the ROC.
This form includes:

  • List of shareholders who received bonus shares
  • Number of shares allotted
  • Board/shareholder resolutions
  • Updated share capital details

PAS-3 must be filed within the prescribed time limit.

Step 6: Update Statutory Registers

After filing PAS-3, the company updates:

  • Register of Members
  • Share certificates (if applicable)
  • Demat credit records

This completes the allotment process.

Step 7: Inform Stock Exchange (If Company Is Listed)

Listed companies must also:

  • Inform the stock exchange
  • Ensure demat credits
  • Receive listing approval for the new shares

Why Filing Bonus Return Is Important

  • Legally records the new shares issued
  • Updates company’s share capital
  • Maintains transparency
  • Required for compliance under Companies Act

FAQ

Q1. Which form is used for Bonus Return?
Form PAS-3 is used for filing the Return of Allotment.

Q2. Is shareholder approval always required?
Not always. It depends on company rules and Articles of Association.

Q3. What if the company delays filing PAS-3?
Late fees and penalties may apply.

⚠ Disclaimer

This article provides general information on filing Bonus Return and issuing bonus shares. Actual compliance may vary depending on company type, authorised capital, and MCA rules. Always consult a company secretary or compliance expert before filing any ROC forms.

More posts