0Meaning:
- Issue of share/debenture at a price more than the face value
- The premium amount is credited to separate account called ‘Securities Premium Account
- It is not forming part of share capital/debenture
The securities premium account may be applied by the company:
(a) In paying up unissued shares of the company to be issued to members of the company as fully paid bonus shares;
(b) In writing off the preliminary expenses of the company;
(c) In writing off the expenses of, or commission paid or discount allowed on, any issue of shares or debentures of the company; or
(d) In providing for the premium payable on the redemption of any redeemable preference shares or of any debentures of the company.
(e) Buy back of share.
Note: The word share premium has been substituted with the word “securities premium” in the Companies (Amendment) Act, 1999.
