Question

Securities Premium cannot be utilized for ______.

Options

• Buy-back of its own shares

• Writing off preliminary expenses of the Company

• Issuing partly paid bonus shares to shareholders

• Issuing fully paid bonus shares to shareholders

Answer 1

Securities Premium cannot be utilized for issuing partly paid bonus shares to shareholders.

Explanation:

As per Section 52(2) of the Companies Act, 2013, Securities Premium can be used for:

1. Issuing fully paid bonus shares to shareholders.

2. Writing off preliminary expenses.

3. Writing off commission/discount on issue of shares or debentures.

4. Providing for premium payable on redemption of debentures or preference shares.

5. Buy-back of own shares (Sec 68).