Shareholders’ Ordinary Resolution for Bonus or Capitalisation Issue

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.

Background on bonus shares and the issue process

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.

Use this ordinary resolution to approve a bonus (capitalisation) issue

This Shareholders’ Ordinary Resolution – Bonus and Capitalisation Issue is the shareholder resolution required in order to approve a bonus issue following its recommendation at a board meeting.

For many companies, including those with model articles (article 36), a bonus issue is permitted but requires the approval of shareholders by ordinary resolution.

Shareholders’ Ordinary Resolution for Bonus or Capitalisation Issue is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.