Fully paid‑up shares can be issued by way of donation - Companies Law - Letter : No. 8/50(77)/65‑CL‑V,

Letter : No. 8/50(77)/65 ‑ CL ‑ V, dated 10 ‑ 8 ‑ 1965. Subject:- Fully paid ‑ up shares can be issued by way of donation A company limited by shares has no power to issue shares as fully paid‑up as a gift or bonus to the shareholders although a contract to do so has been made bona fide and registered under the Act. If there is no payment in money s worth for the shares, the allotment would be ultra vires. Consequently, the allotment of shares as fully paid‑up to a charitable trust by way of donation is not valid in law.