Also known as a scrip issue or capitalisation issue. An issue of new shares or debentures to existing members, generally in the same proportions as their existing holdings. No payment is required from members as the bonus shares or debentures are paid up using the company's profits or reserves.

What is meant by bonus share issue?

A bonus issue is an offer given to the existing shareholders of the company to subscribe for additional shares. ... For example, the company may decide to give out one bonus share for every ten shares held.

Who are eligible for bonus shares?

All existing shareholders before the ex-date and record date are eligible to receive bonus shares issued by a company. However, to qualify to receive bonus shares, the company stocks must be bought before the ex-date.