Question

Define the term bonus and explain the conditions to be satisfied by a company before issue of bonus shares.

Answer 1

Answer:

A bonus is a financial compensation that is above and beyond the normal payment expectations of its recipient. Bonuses may be awarded to both entry-level employees and to senior level executives. Bonuses may be dangled as incentives to prospective employees and can also be distributed to a company's shareholders.

Explanation:

For a company to issue Bonus Shares the following conditions must be satisfied : ... Checks to ensure that the company has not defaulted in payment of Principal or Interest in respect of Fixed Deposits or Debt Securities or any other employee statutory dues i.e provident fund, gratuity, bonus, etc.