Question

premium on issues of shares can be used for multiple choice​

Answer 1

Answer:

Securities Premium Account can be used for writing off any preliminary expenses of the company. To write off expenses of issue of shares and debentures, such as commission paid or discount given on the issue of shares. ... And finally, it can be utilized by the company to buy back its own shares.

Explanation:

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Answer 2

Premium on issues of shares can be used for writing off Preliminary Expenses.

• According to section 52(2) of the Companies Act, 2013, Share or Security Premium can be utilized for writing off Preliminary Expenses. It can neither be used for writing off a loss on sale assets nor bad debts.
• The funds in the share premium account cannot be allocated as dividends and may just be used for objectives summarized in the company's bylaws or other regulating documents.
• Often, the share premium can be utilized to pay the expenses of issuing equity, such as underwriter payments or for issuing bonus shares to shareholders.
• It can be wielded while writing the preliminary expenses of the company Writing off the expenses of, or the board paid or discount authorized on any issue of securities or debentures of the company.

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