Difference Between
versus

Right Shares vs. Bonus Shares: Know the Difference

Shumaila Saeed
By Shumaila Saeed || Published on January 19, 2024
Right Shares are offered to existing shareholders at a discount, whereas Bonus Shares are additional free shares given to existing shareholders.
Right Shares vs. Bonus Shares

Key Differences

Right Shares are issued by companies to their existing shareholders, offering them the opportunity to buy additional shares at a discounted price. On the contrary, Bonus Shares are issued without any cost, as a reward to the existing shareholders, utilizing the company's accumulated profits.
Shumaila Saeed
Shumaila Saeed
Jan 19, 2024
While Right Shares require shareholders to pay an additional amount to acquire more shares, Bonus Shares are allocated based on the number of shares already owned without any extra payment. This distinction highlights the financial commitment needed for Right Shares, unlike Bonus Shares.
Shumaila Saeed
Shumaila Saeed
Jan 19, 2024
The issuance of Right Shares is often a strategy to raise additional capital for the company. In contrast, Bonus Shares are distributed when a company wishes to reinvest its profits into the business while rewarding its shareholders.
Shumaila Saeed
Shumaila Saeed
Jan 19, 2024
Right Shares give a privilege to existing shareholders to buy shares before the public, maintaining their ownership percentage. Bonus Shares, however, are more about distributing additional shares, reflecting the company's growth and profitability.
Shumaila Saeed
Shumaila Saeed
Jan 19, 2024
In the case of Right Shares, shareholders can choose to buy or ignore the offer. With Bonus Shares, the additional shares are automatically added to the shareholders' portfolios, signifying a direct increase in their holdings.
Shumaila Saeed
Shumaila Saeed
Jan 19, 2024
ADVERTISEMENT

Comparison Chart

Cost to Shareholders

Shareholders pay at a discounted price
No additional cost to shareholders
Shumaila Saeed
Shumaila Saeed
Jan 19, 2024

Purpose

To raise additional capital
To reinvest profits and reward shareholders
Shumaila Saeed
Shumaila Saeed
Jan 19, 2024

Shareholder Action

Optional purchase
Automatically allocated
Shumaila Saeed
Shumaila Saeed
Jan 19, 2024

Source of Shares

New share issuance
Company's accumulated profits
Shumaila Saeed
Shumaila Saeed
Jan 19, 2024

Impact on Ownership

Maintains or increases ownership share
Increases ownership share without dilution
Shumaila Saeed
Shumaila Saeed
Jan 19, 2024
ADVERTISEMENT

Right Shares and Bonus Shares Definitions

Right Shares

Shares offered to existing shareholders at a discounted price.
The company offered right shares to finance its expansion.
Shumaila Saeed
Shumaila Saeed
Jan 08, 2024

Bonus Shares

Additional shares given free of cost to existing shareholders.
The bonus shares increased her holdings in the company.
Shumaila Saeed
Shumaila Saeed
Jan 08, 2024

Right Shares

Privileged offer to current shareholders before public issuance.
The right shares were issued before the new public offering.
Shumaila Saeed
Shumaila Saeed
Jan 08, 2024

Bonus Shares

Reflects company’s profitability and desire to reinvest profits.
The profitable year resulted in the distribution of bonus shares.
Shumaila Saeed
Shumaila Saeed
Jan 08, 2024

Right Shares

A method for companies to raise additional funds.
Right shares were issued to gather capital for new projects.
Shumaila Saeed
Shumaila Saeed
Jan 08, 2024
ADVERTISEMENT

Bonus Shares

Reward to shareholders using the company's accumulated profits.
Bonus shares were distributed from the company's retained earnings.
Shumaila Saeed
Shumaila Saeed
Jan 08, 2024

Right Shares

An opportunity for shareholders to maintain their ownership stake.
He bought right shares to keep his percentage in the company.
Shumaila Saeed
Shumaila Saeed
Jan 08, 2024

Bonus Shares

Increase in share capital without additional investment from shareholders.
The issuance of bonus shares expanded the company's share capital.
Shumaila Saeed
Shumaila Saeed
Jan 08, 2024

Right Shares

Shareholders’ right to purchase additional shares.
As an investor, she exercised her rights to buy right shares.
Shumaila Saeed
Shumaila Saeed
Jan 08, 2024

Bonus Shares

Automatic allocation of extra shares to current shareholders.
His portfolio grew automatically with the new bonus shares.
Shumaila Saeed
Shumaila Saeed
Jan 08, 2024

Repeatedly Asked Queries

Why are Bonus Shares issued?

To reinvest profits and reward shareholders.
Shumaila Saeed
Shumaila Saeed
Jan 19, 2024

Do Right Shares require payment?

Yes, at a discounted price.
Shumaila Saeed
Shumaila Saeed
Jan 19, 2024

Why do companies issue Right Shares?

To raise additional capital.
Shumaila Saeed
Shumaila Saeed
Jan 19, 2024

Do shareholders pay for Bonus Shares?

No, they are issued free of cost.
Shumaila Saeed
Shumaila Saeed
Jan 19, 2024

What are Bonus Shares?

Free additional shares given to shareholders from profits.
Shumaila Saeed
Shumaila Saeed
Jan 19, 2024

How do Bonus Shares affect share capital?

It increases without new funds.
Shumaila Saeed
Shumaila Saeed
Jan 19, 2024

Are Right Shares common in startups?

Less common, as they require capital infusion.
Shumaila Saeed
Shumaila Saeed
Jan 19, 2024

Can shareholders decline Right Shares?

Yes, they can choose not to purchase.
Shumaila Saeed
Shumaila Saeed
Jan 19, 2024

What is the impact of Right Shares on share capital?

It increases with the new share issuance.
Shumaila Saeed
Shumaila Saeed
Jan 19, 2024

What are Right Shares?

Additional shares offered to existing shareholders at a discount.
Shumaila Saeed
Shumaila Saeed
Jan 19, 2024

Are Bonus Shares optional for shareholders?

No, they are automatically allocated.
Shumaila Saeed
Shumaila Saeed
Jan 19, 2024

Do Bonus Shares dilute ownership?

No, they increase shareholding proportionately.
Shumaila Saeed
Shumaila Saeed
Jan 19, 2024

Do Right Shares dilute ownership?

Not if existing shareholders purchase them.
Shumaila Saeed
Shumaila Saeed
Jan 19, 2024

Share this page

Link for your blog / website
HTML
Link to share via messenger
About Author
Shumaila Saeed
Written by
Shumaila Saeed
Shumaila Saeed, an expert content creator with 6 years of experience, specializes in distilling complex topics into easily digestible comparisons, shining a light on the nuances that both inform and educate readers with clarity and accuracy.

Popular Comparisons

Trending Comparisons

Poster vs. InfographicPoster vs. Infographic
Shumaila SaeedShumaila Saeed
December 25, 2023
A Poster is a large printed image or notice for public display, while an Infographic is a visual representation of information or data.
Japanese Eyes vs. Chinese EyesJapanese Eyes vs. Chinese Eyes
Shumaila SaeedShumaila Saeed
December 25, 2023
Japanese Eyes and Chinese Eyes refer to linguistic structures in Japanese and Chinese respectively, each reflecting unique aspects of grammar and syntax.
Pulley vs. SheavePulley vs. Sheave
Hifza NasirHifza Nasir
April 4, 2024
A pulley is a wheel on an axle designed to support movement and change of direction of a taut cable, while a sheave is the wheel part of a pulley system that specifically interacts with the cable.
LTE vs. CDMALTE vs. CDMA
Shumaila SaeedShumaila Saeed
February 4, 2024
LTE (Long Term Evolution) is a 4G wireless communication standard with high-speed data transfer, while CDMA (Code Division Multiple Access) is an older 2G/3G technology for mobile networks.
Nike Air Force 1 LE vs. Nike Air Force 1 '07Nike Air Force 1 LE vs. Nike Air Force 1 ’07
Hifza NasirHifza Nasir
April 16, 2024
Nike Air Force 1 LE often represents limited edition releases with unique designs, while Nike Air Force 1 '07 is a modern version of the classic, maintaining the iconic style with updated materials.
Pycharm Community vs. Pycharm ProPycharm Community vs. Pycharm Pro
Shumaila SaeedShumaila Saeed
February 4, 2024
PyCharm Community is a free, open-source IDE for Python development, while PyCharm Pro is a paid version with additional advanced features like web development support and database tools.
Formal Assessment vs. Informal AssessmentFormal Assessment vs. Informal Assessment
Shumaila SaeedShumaila Saeed
December 25, 2023
Formal assessments are structured and standardized, while informal assessments are flexible and observational.
House of Representatives vs. SenateHouse of Representatives vs. Senate
Shumaila SaeedShumaila Saeed
December 25, 2023
The House of Representatives, based on population, drafts tax legislation and impeachment charges, while the Senate, with equal representation per state, tries impeachments and ratifies treaties.
Goth vs. AltGoth vs. Alt
Shumaila SaeedShumaila Saeed
February 5, 2024
Goth is a dark, often Victorian-influenced subculture and style, while Alt (alternative) is a broader term encompassing non-mainstream styles and attitudes.
Moms vs. Mom'sMoms vs. Mom’s
Shumaila SaeedShumaila Saeed
February 22, 2024
"Moms" is the plural form of "mom," referring to multiple mothers, while "Mom's" is the possessive form of "mom," indicating something belongs to or is related to a mother.
Shall vs. Shall beShall vs. Shall be
Shumaila SaeedShumaila Saeed
February 14, 2024
"Shall" is a modal verb used to indicate future action or a strong intention, while "shall be" is its future tense form, often implying a sense of obligation or inevitability.
Login vs. LogonLogin vs. Logon
Shumaila SaeedShumaila Saeed
December 25, 2023
"Login" and "Logon" are often used interchangeably to describe the process of gaining access to a computer system, but "login" can also refer to the credentials used for access.
2 Pole Motors vs. 4 Pole Motors2 Pole Motors vs. 4 Pole Motors
Shumaila SaeedShumaila Saeed
December 25, 2023
2 Pole Motors have one pair of magnetic poles and run at higher speeds, while 4 Pole Motors have two pairs of poles and operate at lower speeds, offering higher torque.
Happen vs. OccurHappen vs. Occur
Shumaila SaeedShumaila Saeed
December 25, 2023
"Happen" refers to events or actions taking place, often with an unplanned or casual connotation, while "occur" implies events or phenomena that take place, often with a more formal or scientific tone.
CeraVe vs. LubridermCeraVe vs. Lubriderm
Shumaila SaeedShumaila Saeed
February 8, 2024
CeraVe and Lubriderm are both skincare brands; CeraVe focuses on ceramide-rich formulas, while Lubriderm is known for its basic, gentle moisturizers.
Contact Force vs. Field ForceContact Force vs. Field Force
Shumaila SaeedShumaila Saeed
December 25, 2023
Contact Force is a force applied through physical contact, while Field Force acts over a distance without physical contact.
Cache Memory vs. Main MemoryCache Memory vs. Main Memory
Hifza NasirHifza Nasir
May 18, 2024
Cache memory is a fast, volatile memory for quick access to frequently used data, enhancing processor speed. Main memory (RAM) is a larger, slower volatile memory for currently used data and programs.
FHSS vs. DSSSFHSS vs. DSSS
Shumaila SaeedShumaila Saeed
February 25, 2024
FHSS (Frequency-Hopping Spread Spectrum) uses rapid frequency changes within a band. DSSS (Direct Sequence Spread Spectrum) spreads signals over a wider frequency using a code.
NM3 vs. M3NM3 vs. M3
Hifza NasirHifza Nasir
April 19, 2024
NM3 measures gas volume under Normal conditions (0°C and 1.01325 bar), while M3 measures volume under the conditions at which it is measured, without standard adjustment.
Term vs. SemesterTerm vs. Semester
Shumaila SaeedShumaila Saeed
December 25, 2023
Term is a general period for any division of the academic year, while Semester specifically refers to half of an academic year.
Gorilla Glass 3 vs. Gorilla Glass 5Gorilla Glass 3 vs. Gorilla Glass 5
Shumaila SaeedShumaila Saeed
January 1, 2024
Gorilla Glass 3 offers improved scratch resistance and durability compared to its predecessors, while Gorilla Glass 5 focuses on enhanced drop protection and toughness.
Interviewer vs. IntervieweeInterviewer vs. Interviewee
Shumaila SaeedShumaila Saeed
December 25, 2023
The interviewer conducts the interview, asking questions and guiding the conversation, while the interviewee is the one responding and being evaluated.
2chan vs. 4chan2chan vs. 4chan
Shumaila SaeedShumaila Saeed
February 1, 2024
2chan is a Japanese imageboard primarily for sharing images and discussion. 4chan is an English-language imageboard with a diverse range of topics and more international user base.
Catapult vs. TrebuchetCatapult vs. Trebuchet
Shumaila SaeedShumaila Saeed
January 4, 2024
A catapult is a ballistic device using tension or torsion to launch projectiles, while a trebuchet is a type of catapult using a counterweight for greater force and distance.

Featured Comparisons

New Comparisons