Can a pvt ltd company issue new shares and collect a premium on the same? If yes, is the premium so collected treated as income?
1 Replies
Rahul Patel
(Accounts Executive)
(94 Points)
Replied 23 April 2014
Yes, shares can be issued at a Premium.
But such Premium amount can be used only for the following purposes:
1. for issuing bonus shares.
2. for writing off preliminary expenses.
3. at the time of redemption of reedemable preference shares..
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