The most important difference between a bonus share issue and a rights issue, from the issuing company's point of view, is that they:

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A bonus share issue involves the company issuing free additional shares to its existing shareholders in proportion to their existing holdings, while a rights issue offers existing shareholders the opportunity to purchase new shares at a discounted price. The main difference between the two is that a bonus share issue does not raise any new capital for the company, while a rights issue does. Therefore, a rights issue has a different effect on cash flow compared to a bonus issue. Both bonus shares and rights issues typically do not require different accounting practices and benefit existing shareholders, but the key differentiator is their impact on cash flow.

The Most Important Difference Between a Bonus Share Issue and a Rights