Issuing Bonus Shares Templates

A bonus issue of shares (also called a capitalisation or scrip issue) is an issue of new shares to existing shareholders in proportion to their current holdings. Instead of paying out profits as cash dividends, the company uses its reserves to pay up additional shares that are then issued to shareholders.

This section brings together a practical guidance note and supporting board and shareholder documents to help you document a bonus issue properly.

When to Use These Templates

Best for:

Rewarding existing shareholders without paying a cash dividend.
Tidying or restructuring the company’s share capital.
Capitalising undistributed profits or reserves.

What This Section Covers

What bonus shares are and why companies use them.
The procedure and typical approvals required for a bonus or capitalisation issue.
Board minutes for approving a bonus issue, with or without shareholder approval.
A shareholders’ ordinary resolution to approve a bonus or capitalisation issue where needed.

We have not considered any tax or accounting implications. You should consider taking independent legal, tax and accounting advice before proceeding.

🔀 Document Toolkit: Typical Sequence (may vary)

Step 1 - Understand the process

Start with the Guidance Note - Bonus Shares.

This explains what bonus shares are, reasons for using them, and the procedure for implementing a bonus or capitalisation issue.

Step 2 - Board approval where shareholder consent is not required

If the directors can approve the bonus issue without shareholder approval (for example, where the articles allow it and any other requirements are satisfied), use:

Step 3 - Board Minutes - Bonus or Capitalisation Issue

These minutes record the directors declaring and resolving to implement the bonus issue.

Step 4 - Board and shareholder approvals where member consent is required

If shareholder approval is needed, use both of the following:

Board Minutes - Bonus Issue with Shareholder Approval to record the directors’ decision to recommend and proceed with a bonus issue subject to shareholder approval.
Shareholders’ Ordinary Resolution for Bonus or Capitalisation Issue for the members to formally approve the bonus or capitalisation issue.

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