(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 shall be transferred to an account called “the share premium account”.
(2)The share premium account may be applied by the company in paying up unissued shares to be allotted to members as fully paid bonus shares, or is writing off—
(a)the company’s preliminary expenses; or
(b)the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company,
or in providing for the premium payable on redemption of debentures of the company.
(3)Subject to this, the provisions of this Act 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.
(4)Sections 131 and 132 below give relief from the requirements of this section, and in those sections references to the issuing company are to the company issuing shares as above mentioned.
Modifications etc. (not altering text)
C1S. 130 applied (1.5.1995) by 1988 c. 1, Sch. 28A, para. 5(2)(a)(as inserted by 1995 c. 4, s. 135, Sch. 26 para. 3 (with Sch. 8 para. 55(2), 57(1)))