Template Bonus Share (Scrip or Share Capitalisation Issue) Board Minutes

Board Minutes - Bonus or Capitalisation Issue

CO.CA.MM.15
A bonus or capitalisation issue is also known as a scrip issue. With a scrip or bonus issue, a company transfers profits to a fund called its capital redemption reserve and uses the funds to issue bonus shares to the members in proportion to their existing holdings.

Further details about what a bonus issue is, why bonus shares are issued and the procedure to issue bonus shares is available in our Guidance Note on Bonus Shares.

These Board Minutes – Bonus and Capitalisation Issue resolve to declare a bonus issue without a subsequent shareholder resolution. These board minutes should only be used by companies with one class of share who do not require specific authority from the shareholders to issue shares. A company must review its articles to check they permit such an issue and the terms on which bonus shares can be issued.

Many companies will require shareholder approval to issue bonus shares, in which case our Board Minutes – Bonus or Capitalisation Issue requiring shareholder approval may be more appropriate.

These board minutes are in open format. The requisite details should be inserted into the highlighted fields or the wording can be adjusted to suit your purposes. Wording in square brackets is optional. If it is required, then the brackets should be deleted and the wording within them retained. If the wording is not required, then it can be deleted.

The company must notify the allotment of bonus shares to Companies House on Form SH01. Companies House own advice states that the amount paid on each share should be shown as 'nil' or '0.00' and the shares as paid up 'otherwise than in cash'. Form SH01 is available in the Free Section of our website and on Companies House website, www.companieshouse.gov.uk.

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