MOST OF THE COMPANIES IN NEPAL RECENTLY ISSUED SHARES AT PREMIUM.WHAT ARE THE REASON BEHIND THIS LETS DISCUSS ABOUT IT.THE COMPANIES USE SHARE PREMIUM ACCOUNTS TO PAY OFF EXPENSES ABOUT EQUITY,SUCH AS UNDERWRITING FEES,OR TO COVER THE COST FOR ISSUING BONUS SHARES.WE HAVE SEEN ONE CEMENT COMPANY AND TWO INSURANCE COMPANIES ISSUE SHARES AT PREMIUM RECENTLY.
WHAT ARE THE RULES?
AS PER SECTION 52(2)OF COMPANIES ACT 2013 STATES THAT PREMIUM ON ISSUE SHARES CAN BE USED FOR ISSUING FOR FOLLOWING REASONS :
1.IT CAN BE ISSUED FULLY PAID UP BUSINESS SHARES.
2.IT CAN BE USED FOR THE PRELIMINARY EXPENSES OF THE COMPANY.
3.WRITTING OFF THE EXPENSES OF ,OR THE COMMISSION PAID OR DISCOUNT ALLOWED ON ANY ISSUE OF SECURITIES (STOCK)
