Which of the following is not a purpose for which the securities premium amount can be used?

see full answer

High-Paying Jobs That Even AI Can’t Replace — Through JEE/NEET

🎯 Hear from the experts why preparing for JEE/NEET today sets you up for future-proof, high-income careers tomorrow.

An Intiative by Sri Chaitanya

Issuing fully paid bonus shares to shareholders

Issuing partly paid up bonus shares to shareholders

In purchasing ifs own shares (buy back)

Writing off preliminary expenses of the company

answer is B.

(Unlock A.I Detailed Solution for FREE)

JEE

NEET

Foundation JEE

Foundation NEET

CBSE

Detailed Solution

The securities premium amount cannot be used to issue to issue partly paid up bonus shares to shareholders, as the shares are partly paid up.

It can only be used for

(i) To issue fully paid-up bonus shares to the shareholders

(ii) To write off preliminary expenses of the companies

(iii) To write off the commission paid or expenses on issue of shares/debentures

(iv) To pay premium on the redemption of preference shares or debentures of the company

Buy bank of equity shares and other securities as per section 68.

Watch 3-min video & get full concept clarity

No courses found

Ready to Test Your Skills?

Check your Performance Today with our Free Mock Test used by Toppers!

Take Free Test