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Can security premium be use as distributing dividend?

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Dev asked almost 2 years ago

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5 Answers
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 lochan answered almost 2 years ago

SECURITIES PREMIUM ACCOUNT CAN BE UTILISED FOR a) Issuing fully paid bonus shares to the members. (b) Writing off preliminary expenses. (c) Writing off the expenses of or the commission paid or discount allowed on any issue of shares or debentures of the company. (d) Providing for the premium payable on the redemption of preference shares or debentures of the company. (e) In purchasing its own shares i.e. Buy Back u/s 77 A Thanks

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Kuldeep Dhamecha answered almost 2 years ago

Yes, Securities premium can be used for payment of dividend as it's a free reserve

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Open uri20170510 32134 1ive9a3?1494421760 purvi answered almost 2 years ago

Hello, Security premium **Realised in Cash** can be used for distributing dividend to shareholder. Thanks & Regards, Purvi Vasa

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Manoj answered almost 2 years ago

Hello, The Securities Premium can be used only for the purpose as mention in the Companies Act, 2013 and no other ways is allowed

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Open uri20170510 32134 nwqd3c?1494421745 NITESH SHARMA answered almost 2 years ago

Yes, Securities Premium can be used for distributing dividend as it is a free reserve. As per Companies Act 2013, Dividend shall be declared or paid only out of free reserves of a company [Section 123(1) third proviso].

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