Part 17A company’s share capital
Chapter 7Share premiums
The share premium account
610Application of share premiums
1
If a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premiums on those shares must be transferred to an account called “the share premium account”.
2
Where, on issuing shares, a company has transferred a sum to the share premium account, it may use that sum to write off—
a
the expenses of the issue of those shares;
b
any commission paid on the issue of those shares.
3
The company may use the share premium account to pay up new shares to be allotted to members as fully paid bonus shares.
4
Subject to subsections (2) and (3), the provisions of the Companies Acts relating to the reduction of a company’s share capital apply as if the share premium account were part of its paid up share capital.
5
This section has effect subject to—
section 611 (group reconstruction relief);
section 612 (merger relief);
section 614 (power to make further provisions by regulations).
6
In this Chapter “the issuing company” means the company issuing shares as mentioned in subsection (1) above.