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Who is eligible for bonus shares?

Who is eligible for bonus shares? The shareholders who hold the company's shares before the record date and ex-date qualify to receive the bonus share. In India, companies follow a system wherein the record date falls two days after the ex-date. To earn bonus shares, shareholders must hold shares before the ex-date.

5paisa.com - What Is Bonus Share: Meaning, Advantages & Types - 5paisa

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What is a bonus share?-Your browser does not support the audio element.

Introduction Investment is a crucial part of financial growth. Among other options, investment in shares or equity has garnered the most traction. Today, stocks and equity make up 12.9% of all investments in India. Moreover, in 2021, the stock market added 142 lakhs retail traders in India. The number is much more prominent globally. Shares are collectively the capital of a company. Each share holds a unit of ownership in the company. There are different types of shares, such as equity, preference, bonus, and others. This blog is dedicated to defining bonus shares, what a bonus issue of shares is, and what is a bonus in the share market. What are Bonus Shares? The bonus shares meaning states that they are the additional set of shares allotted by the company to the existing shareholders as a 'bonus.' These additional shares are allotted because the company can't pay dividends to shareholders despite making profits. However, bonus shares can only apply when the company has a massive free reserve and has booked hefty profits. Furthermore, these reserves or profits cannot be used for other purposes than to distribute dividends. The bonus shares are distributed according to the shareholder's proportionate share in the company. For example, if a company announces a one-for-one bonus share, the shareholder will hold double its current holding. Let's assume shareholder A had 200 shares in company XYZ. After announcing one on one bonus shares, shareholder A will hold 400 shares in company XYZ. Who is eligible for bonus shares? The shareholders who hold the company's shares before the record date and ex-date qualify to receive the bonus share. In India, companies follow a system wherein the record date falls two days after the ex-date. To earn bonus shares, shareholders must hold shares before the ex-date. If someone bought shares on the ex-date, they wouldn't qualify for earning bonus shares. The bonus shares are allotted after they get their new ISIN. The process usually takes 15 days. Advantages of Bonus Shares Bonus shares benefit both the company and shareholders. Here's how: Company ● Bonus shares help the company sail out of the situation of sharing cash dividends with the shareholders. ● The company increases its shareholding and spikes market value with bonus shares. ● Bonus shares signify that a company has had a good financial year. Investors ● Investors earning bonus shares fall out of taxation.

● It is a promising option for long-term holders.

● Investors have increased their holdings in the company without spending anything.

Disadvantages of Bonus Shares There are some disadvantages to bonus shares too. Here are a few: Company ● Shares help in raising money. However, bonus shares raise no money and defy the concept of shares. ● If a company opts to issue bonus shares over dividends, it increases the burden on the company in the long run. ● Shareholders who invest to earn dividends might step back from further investment. Investors ● There is not much of a disadvantage for an investor. However, if the investor was eyeing a dividend, bonus shares can be disappointing for them. In the long run, bonus shares could be a better deal.

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What is a bonus account?

Bonus Account means, with respect to any Participant, the total amount of the Company's liability for payment of deferred compensation to the Participant under this Plan, including any accumulated Interest Equivalents and/or Dividend Equivalents.

lawinsider.com - Bonus Account Definition - Law Insider

Other existing terms and conditions relating to the Recipient’s Special Bonus Account shall apply accordingly.2.3 Under no circumstances shall Singtel Mobile provide a refund to the User (whether in cash or otherwise) once the top-up amount and transaction fee is deducted from the User’s Main Account.2.4 Singtel Mobile reserves the right to amend the prepaid top-up fixed denominations and transaction fee at any time. The Company may, from time to time, credit bonus amounts ("Bonus Amounts") to your Winnings and Bonus Account in connection with promotional offers or other schemes. The corresponding top-up amount will be credited to the Recipient’s Special Bonus Account and if the Recipient’s Special Bonus Account is due to expire within the next fourteen (14) days, the validity of the Recipient’s Special Bonus Account shall automatically be extended by fourteen (14) days from the date of top-up. Such Deferred Bonus shall be credited to the Participant’s Deferred Bonus Account as of the first business day in January of the year that the Bonus otherwise would have been paid to the Participant in the absence of any deferral hereunder.

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