Question

As per the provisions of Companies Act, 2013 Securities Premium cannot be utilized for ______.

Options

• buy back of shares

• issue of partly paid bonus shares

• writing off discount on issue of debentures

• writing off preliminary expenses 

Answer 1

As per the provisions of Companies Act, 2013 Securities Premium cannot be utilized for issue of partly paid bonus shares.

Explanation:

The Companies Act of 2013 lays out the acceptable uses of securities premiums to guarantee the open and appropriate use of the money raised by the business through the issuing of shares at a premium. Protecting shareholder interests and preserving the integrity of the company's capital structure are the major goals of the prohibition on utilizing securities premiums for the issue of partially paid bonus shares.