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Utilisation of Share Premium Account

This query is : Resolved 

08 September 2009 Dear Sirs / Madam,

As per section 78 of the Companies act share premium account can utilised only as per the act. but Want you to ask that Share Premium Amount lying with company can be utilised for expansion purpose or paying of day to day expenses also.

if not than what are the penalty proviosion related to them & to whom, if it is applicable.

08 September 2009 No it can not be. Penalty would be so high that your purpose could not be solved if yyu use it for other purposes

08 September 2009 If no Penalty is prescribed in particular section then Penalty u/s 629A of the companies act, 1956 would be applicable.

As section 78 is silent about penalty hence section 629A would be applicable in your case.

Regards




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