Under Section 63(1) of the Companies Act, 2013, fully paid bonus shares can be issued to members out of which of the following funds?
Select Your Answer (Keyboard: A, B, C, D)
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Corporate and Other LawsMCQQuestion 12532 of 300
All Questions Correct Answer
✅ Option A — Free reserves, Securities Premium Account, or Capital Redemption Reserve Account
All Options:
- AFree reserves, Securities Premium Account, or Capital Redemption Reserve Account ✓
- BRevaluation reserve created by revaluation of fixed assets
- CReserve created out of amalgamation profits without realization in cash
- DBorrowed loan funds sanctioned by a financial institution
Detailed Solution & Explanation
Correct Answer: Option **A** (Free reserves, Securities Premium Account, or Capital Redemption Reserve Account)
**Statutory Provision (Section 63 - Issue of Fully Paid-up Bonus Shares):**
Section 63(1) explicitly permits issue of bonus shares out of: (i) free reserves; (ii) securities premium account; or (iii) capital redemption reserve account. Section 63(2) prohibits capitalizing reserves created by revaluation of assets.
Therefore, Option A is the correct legal position under the ICAI curriculum.
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