Question

Diffrenece between securities premium and premuim on redemption

Answer 1

kam and Jada on redemption

Answer 2

Share Premium :- the amount by which the amount received by a company for a stock issue exceeds its face value.

Securities Premium:- Share Premium Account is also known as Securities Premium Account. According to Indian Company Act 1956, the amount of security premium may be used only for the following purposes:

1. To write off the preliminary expenses of the company.

2. To write off the expenses, commission or discount allowed on issued of shares or debentures of the company.

3. To provide for the premium payable on redemption of redeemable preference shares or debentures of the company.

4. To issue fully paid bonus shares to the shareholders of the company.