Section 81: Application of premium received on issue of shares

81. Application of premium received on issue of shares.—(1) If a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or the value of the premiums on those shares must be transferred to an account, called "the share premium account". (2) Where, on issuing shares, a company has transferred a sum to the share premium account, it may use that sum to write off— (a) the preliminary expenses of the company; (b) the expenses of, or the commission paid or discount allowed on, any issue of shares of the company; and (c) in providing for the premium payable on the redemption of any redeemable preference shares of the company. (3) The company may also use the share premium account to issue bonus shares to its members.

Effective date: 2017-05-30

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