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An issue of bonus shares is referred to as a bonus share issue. A bonus issue is usually based upon the number of shares that shareholders already own. [2] (For example, the bonus issue may be "n shares for each x shares held"; but with fractions of a share not permitted.) While the issue of bonus shares increases the total number of shares ...
In corporate finance, a scrip issue, also known as capitalisation issue or bonus issue, is the process of creating new shares which are given free of charge to existing shareholders. It is a form of secondary issue where a company's cash reserves are converted into new shares and given to existing shareholders , [ 1 ] or an issue of additional ...
Many companies use employee stock options plans to retain, reward, and attract employees, [3] the objective being to give employees an incentive to behave in ways that will boost the company's stock price. The employee could exercise the option, pay the exercise price and would be issued with ordinary shares in the company.
Some other scenarios for triggering a capital surplus include when the Government donates a piece of land to the company. The capital surplus/share premium account (SPA) is generally not distributable, but may be used to: write off the expenses/commission relating to the issue of those shares, or; make a bonus share issue of fully paid-up shares.
The issue of bonus shares, even if funded out of retained earnings, will in most jurisdictions not be treated as a dividend distribution and not taxed in the hands of the shareholder. Retaining earnings by a company increases the company's shareholder equity, which increases the value of each shareholder's shareholding.
Here's why bonuses are a taxing proposition. For premium support please call: 800-290-4726 more ways to reach us
For most people, charitable contributions are mostly about what matters most to them -- a way to help those in need or to begin righting a wrong. Billionaires vs. the Middle Class: Who Pays More in...
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