Securities Premium can be used only for the following purposes:
A. To issue fully paid bonus shares to the extent not exceeding unissued share capital of the company;
B. To issue partly paid bonus shares to the extent not exceeding unissued share capital of the company;
C. To write-off the expenses of, or commission paid, or discount allowed on any securities of the company; and
D. Purchase of its own shares (i.e., buy back of shares)
Choose the correct answer from the options given below:
Securities Premium can be used only for the following purposes:
A. To issue fully paid bonus shares to the extent not exceeding unissued share capital of the company;
B. To issue partly paid bonus shares to the extent not exceeding unissued share capital of the company;
C. To write-off the expenses of, or commission paid, or discount allowed on any securities of the company; and
D. Purchase of its own shares (i.e., buy back of shares)
Choose the correct answer from the options given below:
Solution
Section 52(2) permits use of securities premium for issuing fully paid bonus shares, writing off preliminary expenses, share or debenture issue expenses, commission and discount, providing premium on redemption, and buy back. Bonus shares can never be issued partly paid, so B is not permitted.
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