Question
Right shares and Bonus shares
| Points | Rights Shares | Bonus Shares |
| 1. Meaning | In the rights issues, shares are offered to the existing equity shareholders. | Bonus shares are issued to the existing equity shareholders free of cost. |
| 2. Payment | Subscribers have to pay for the Right Shares. | Bonus Shares are issued free of cost to the shareholders. |
| 3. Partly/Fully paid-up shares | Shareholders have to pay for these shares as Application Money, Allotment, Call money, etc. | Bonus Shares are fully paid up shares so no money has to be paid by shareholders to the company. |
| 4. Minimum Subscription | The company has to obtain a minimum subscription for Rights shares. | There is no minimum Subscription to be collected for Bonus shares. |
| 5. Right to Renounce | The shareholders can renounce their shares. | Shareholders cannot renounce their bonus share. |
| 6. Purpose of Issue | The main purpose to issue rights shares is to raise fresh funds and along with it to give a chance to their existing members to increase their shareholding. | The main purpose of issuing bonus shares, is to give rewards to its existing equity shareholders out of its accumulated huge profits or Reserves. |
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