is "share premium" account balance is free reserve?
Rohit Jain (71 Points)
01 October 2017
is "share premium" account balance is free reserve?
3 Replies
Rachit Jain
(99 Points)
Replied 01 October 2017
No sir section 52 restricts the use of SECURITY PREMIUM RESERVE for certain purposes..
Following is the extract of Section 52
2) Notwithstanding anything contained in sub-section (1), the securities premium account may be applied by the company—
(a) towards the issue of unissued shares of the company to the members of the company as fully paid bonus shares;
(b) in writing off the preliminary expenses of the company;
(c) in writing off the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company;
(d) in providing for the premium payable on the redemption of any redeemable preference shares or of any debentures of the company; or
(e) for the purchase of its own shares or other securities under section 68.
Following is the extract of Section 52
2) Notwithstanding anything contained in sub-section (1), the securities premium account may be applied by the company—
(a) towards the issue of unissued shares of the company to the members of the company as fully paid bonus shares;
(b) in writing off the preliminary expenses of the company;
(c) in writing off the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company;
(d) in providing for the premium payable on the redemption of any redeemable preference shares or of any debentures of the company; or
(e) for the purchase of its own shares or other securities under section 68.
Umakanth 07
(54 Points)
Replied 01 October 2017
no , it is not . the balance from share premium account shall be used for special purposes .
Lokesh Sharma
(7 Points)
Replied 02 October 2017
No it is not . However it is a free reserve only for the purposes of Section 68 relating to Buyback
Recent Topics
- NRO Interest - Taxed at source and in Foreign Coun
- Clarity needed on effective date
- Income Tax Refund Deadline Shortened to Five Years
- Rectification Applications for Past GST Demands
- Where can I find a trusted provider to hire a skip
- GST Invoices Series
- FILING OF ITR AY 20-21
- CLAIMING OF U CLAIMED RCM
- Building construction works
- REGARDING GSTR-9 F.Y 2023-24
Related Threads
CAclubindia
