Question:
When the company issues shares at a premium, the amount of premium can be received by the company along with:
When the company issues shares at a premium, the amount of premium can be received by the company along with:
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Premium can be collected with application, allotment or a call, as the terms of issue decide.
Updated On: Oct 26, 2026
- Application money
- Allotment money
- Call money
- Any of the above or with all the above
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The Correct Option is D
Solution and Explanation
Step 1: Recall what premium is:
Securities premium is the amount received above the face value of a share. The company may fix when to collect it.
Step 2: Timing of premium:
The terms of issue decide the date. The premium can be called with application money, with allotment money or with any call.
Some issues ask it in parts across two or three stages. So no single stage is compulsory.
Step 3: Check every option:
(A) Application money is wrong. Premium can be asked with application money, but this is only one of the possible times.
(B) Allotment money is wrong. Premium is often asked with allotment, but it can also be asked at other times, so this option is incomplete.
(C) Call money is wrong. Premium can be asked with a call, but this too is only one of the possible times.
(D) Any of the above or with all the above is CORRECT. The company may receive premium with application, with allotment, with a call or with all of them. So this option covers all cases.
Final Answer:
The premium can be received with any of the stages, option (D).
Securities premium is the amount received above the face value of a share. The company may fix when to collect it.
Step 2: Timing of premium:
The terms of issue decide the date. The premium can be called with application money, with allotment money or with any call.
Some issues ask it in parts across two or three stages. So no single stage is compulsory.
Step 3: Check every option:
(A) Application money is wrong. Premium can be asked with application money, but this is only one of the possible times.
(B) Allotment money is wrong. Premium is often asked with allotment, but it can also be asked at other times, so this option is incomplete.
(C) Call money is wrong. Premium can be asked with a call, but this too is only one of the possible times.
(D) Any of the above or with all the above is CORRECT. The company may receive premium with application, with allotment, with a call or with all of them. So this option covers all cases.
Final Answer:
The premium can be received with any of the stages, option (D).
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