1. Meaning:
1. Bonus shares are such shares that are allotted to the shareholder out of the company’s reserve and profit. The allotees do not have to pay for the shares since such shares are allotted in the place of the dividend.
1. Right shares are first offered to the existing shareholders of the company, who have to make payment for acquiring the shares.
2. Purpose: The purpose of issuing such shares is to pay the dividend to the shareholders in the form of shares instead of cash.
2. The purpose of issuing right shares is to increase the subscribed capital of the company.
3. Consideration: Bonus Shares are allocated to the shareholders without any consideration in terms of money.
3. In case of allotment in right share, the allotee has to pay full value of shares.
4. Right to issue: A company has the right to issue bonus shares only if it so authorised by the articles.
4. A company having share capital has the implied right to issue these for acquiring its unissued capital.