Question

As per Section 52 of Companies Act 2013, the securities premium account can be utilized for which of the following purpose? A. Issue of partly paid bonus share
B. Writing off preliminary expenses
C. Writing off issue expenses
D. Premium payable on redemption of preference share/debenture
E. Buy-back of its own shares or securities under Section 68

• A. A, B, C and D only
• B. B, C, D and E only
• C. A, C, D and E only
• D. A, B, C, D and E

Hint:

Logic Tip: Securities premium can issue only fully paid bonus shares, not partly paid ones.

Answer 1

The Correct Option is B

Step 1:
Securities premium represents the excess amount received over face value of securities.

Step 2:
As per Section 52, securities premium can be used for:
• Writing off preliminary expenses
• Writing off issue expenses
• Premium on redemption
• Buy-back of securities

Step 3:
Bonus shares must be fully paid bonus shares, not partly paid bonus shares. Hence, statement A is incorrect.

Step 4:
Correct statements are: \[ B,\; C,\; D,\; E \] Hence, the correct answer is: \[ \boxed{\text{(2) B, C, D and E only}} \]