What does fully paid shares mean?
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A fully paid share means the purchaser has paid the total issue price of the share. For example, shares may be issued for $1 each, and a shareholder may purchase those shares for $1 each. The shareholder has no further obligation to pay money on that share.
Definition: Bonus shares are additional shares given to the current shareholders without any additional cost, based upon the number of shares that a shareholder owns. These are company’s accumulated earnings which are not given out in the form of dividends, but are converted into free shares.
It is the amount of share capital issued by a company that is subscribed but the company has not received entire nominal (face) value of the share.
What are fully paid and partly paid bonus shares?
Fully Paid Bonus Shares: When bonus shares are distributed free of cost in proportion of holding, it is called Fully Paid Bonus Shares. 2. Partly Paid Bonus Shares: When bonus is applied for converting partly paid shares into fully paid shares, it is called Partly Paid-up Bonus Shares.
What are bonusbonus shares?
Bonus shares are an additional number of shares given by the company to its existing shareholders as “BONUS” when they are not in the position to pay a dividend to its shareholders despite earning decent profits for that quarter.
What is the effect of bonus issue on the market?
When there is a bit value of the shares of a company i.e. market value of shares far exceeds the paid up value of the shares. A company issuing bonus shares is better placed in the market. There is a sharp rise in the price of equity shares following the declaration of bonus issue.
(a) Shareholders need not pay tax on the bonus shares but they are to pay them on the dividend so received in cash. (b) Shareholders, if they so desire, can convert the shares into cash by disposing off the same at a higher price.