for what purposes can securities premium account be used?
Answer (1)
29th Mar, 2020
Hey aspirant, hope you are doing well!
Securities premium accounts can be used by the company for the following purposes.
1. Writing off preliminary expenses of the company
2. for purchase of its own shares or other specified securities
3. In providing for premium payable on the redemption of redeemable preference shares or any debentures of the company.
4. In writing off expenses , or the commission paid , discount allowed on any issue of shares or debentures of the company.
5. Towards the issue of unissued shares of the company to the members as fully paid bonus shares.
The securities premium account can only be used for these 5 purposes by the company.
Hope it helps you! All the best for your future endeavours!
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