Application of Share Premium U/s 78 of Comp Act 1956

Sec 78 Application of Premiums received on issue of Securities

Securities Premium Account  may be applied by the company for the following purposes:

1. For paying up unissued  Securities of the company to be issued to members of the company as fully paid up Bonus securities.
2. For writing off the Preliminary expenses of the company.
3. For writing off expenses of, or the commission paid or discount allowed on, any issue of securities or debentures of  the company.
4. For payment of  Premium on Redemption of preference securities or of any Debentures the company

Share Premium can be used for the following purpose

1. For issuing fully paid Bonus shares

2. To write off preliminary expense (discount on issue of shares or debentures etc.)

3. For buy back of shares

4. in providing for the premium payable on the redemption of any redeemable preference shares or of any debentures of the company.