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Board Minutes - Bonus Issue with Shareholder Approval

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 Issue with Shareholder Approval resolve to declare a bonus issue subject to obtaining shareholder approval by ordinary resolution. A company must review its articles to check they permit such an issue and the terms on which bonus shares can be issued.

For many companies, including those with model articles (article 36), a bonus issue is permitted but it requires the subsequent approval of the shareholders by ordinary resolution. For those companies with only one class of share where specific shareholder approval is not required our Board Minutes – Bonus or Capitalisation Issue 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.

These board minutes should be followed up by our Shareholders’ Ordinary Resolution for Bonus or Capitalisation Issue, which is also available in this sub-folder.

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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