What is bonus share and its record date?

[karansharma70001]

What is bonus share and its record date?

[spooja00752]

Bonus shares can be issued by a company, whenever they wish to. It's a free share given to existing shareholders of the company. When a company announces that they're providing a bonus share, they mention a ratio of how many shares they will issue. For example, if the ratio provided is 1:3, a company will provide 1 share for every 3 shares held by the shareholders. They also announce a record date and issue date. The record date is the date before which the shareholders should be in possession of the shares, and the issue date is when those bonus shares will be issued or reflected in your Demat account. Bonus shares are issued by companies in place of dividends as a reward for shareholders.

[KartikBhatt]

 What is Bonus Share?
It is the share that the company will provide to their existing customer as a bonus. The company will help the customer to give this bonus share when they are not in a position to buy it. Only the company have this right to provide the bonus share to their shareholder. The company will provide bonus shares according to the existing share of the shareholder with the companies.
Suppose you are holding 2000 shares of a company and in addition, the company will give you a bonus of 1000 shares along with Record date and EX-date.
Record Date:- It is the cut-off date decided by the company for the eligibility to avail of the bonus share. All the shareholders that have shared in the Demat account have this record date.
EX-date:- The EX-date is the one day before the Record date. the shareholder needs to buy the share one day before the EX-date to become eligible for the bonus shares.
Advantage of Bonus Share:-
You don't need to pay any tax for the bonus share you received.
Bonus shares will help to build the trust of the investor in the company business.
It is free of cost-share that you will receive from the company. It will enhance your share and build the liquidity of the stocks.