Allotment of Shares
As per the Companies Act, 2013 there are two ways by which a company can raise its funds. It can be done through the private placement of shares and rights issue of shares. It is important to know that a private company can either issue shares to its existing or current shareholders by the method of the rights issue or provide them bonus shares.
Difference Between Right Shares and Bonus Shares are as mentioned Below
||Right shares are the one available to the existing shareholders equivalent to their holdings that can be bought at a fixed price, for a definite period of time.
||Bonus shares refer to the shares issued by the company free of cost to the existing shareholders in the proportion of their holdings, out of accumulated profits and reserves.
||Issued at discounted prices
||Issued free of cost
||To raise fresh capital for the firm.
||To bring the market price per share, within a more popular range.
||Shareholders may fully or partly renounce their rights.
||No such renunciation
|Paid up Value
||Either fully or partly paid up.
||Always fully paid up.