Security premium

Hi

Pls refer to section 78 of the Companies Act 1956 for the uses of premium....

Regards

See Section 78 of company act 1956.

A Comapny can use its Seurities Preimum as per Section 78 of the Companies Act, 1956 for the following reasond

 1) to issue to its members fully paid bonus shares;

2) to write off its preliminary expenses; (Became redundant since prelimanary expenses should be written off immediately after commencement of the business routed through Profit and Loss A/c)

3) to write off the expenses of or the commission paid or discount allowed on any issue of securities or debentures of the company or

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