Question

Securities Premium Account can be used only for the following purposes: (A) To issue partly paid bonus shares to the extent not exceeding unissued share capital of the company;
(B) Buy back of own shares.
(C) To write-off the expenses of, or commission paid, or discount allowed on any securities of the company;
(D) To pay premium on the redemption of preference shares or debentures of the company.
Choose the correct answer from the options given below:

• A. (A), (B) and (D) only
• B. (A), (B) and (C) only
• C. (A), (B), (C) and (D)
• D. (B), (C) and (D) only

Hint:

Securities Premium can never be used for paying dividends or partly paid bonus shares.

Answer 1

The Correct Option is D

Step 1: Legal provisions.
According to Section 52 of the Companies Act, 2013, Securities Premium Account can be used for: - Issuing fully paid bonus shares. - Writing off preliminary expenses, commission, discount on issue. - Paying premium on redemption of preference shares or debentures. - Buy-back of own shares.

Step 2: Analyze options.
(A) To issue partly paid bonus shares → Incorrect (law permits only fully paid bonus shares).
(B) Buy back of own shares → Correct.
(C) To write-off expenses, commission or discount → Correct.
(D) To pay premium on redemption → Correct.

Step 3: Conclusion.
Therefore, the correct set is (B), (C) and (D).

Final Answer: \[ \boxed{(B), (C) \text{ and } (D) \text{ only}} \]