Question
As per Section 52 of Companies Act 2013, the securities premium account can be utlized for which of the following purpose ?
A. Issue of partly paid bonus share
B. Writting off preliminary expenses
C. Writing off the issue expenses
D. Premium payable on the redemption of preference share/debenture
E. Buy-back of its own share or other securities under Section 68.
Choose the correct answer from the options given below :
This question was previously asked in
CUET PG 2026 Agri-Business Management Question Paper (25-Mar-2026) (Shift 2)
The correct answer is
B, C, D and E only
The question asks about the permitted uses of the Securities Premium Account as defined in Section 52 of the Companies Act, 2013.
Analysis of Utilisation Options
According to Section 52(2) of the Companies Act, 2013, Securities Premium Account (also known as Share Premium Account) can be applied for the following purposes:
- Issuing fully paid bonus shares to members.
- Buying back the company's own shares or other securities, as permitted under Section 68.
- Writing off the preliminary expenses incurred by the company.
- Writing off the expenses incurred or commission paid, or discount allowed, on any issue of securities of the company.
- Paying premium, if any, payable on the redemption of any redeemable preference shares or of any debentures.
Evaluating the Options:
- A. Issue of partly paid bonus share: This is not a permitted use. Section 52(2)(a) explicitly mentions the issue of fully paid bonus shares.
- B. Writing off preliminary expenses: This is a permitted use as per Section 52(2)(b).
- C. Writing off the issue expenses: This is a permitted use as per Section 52(2)(c).
- D. Premium payable on the redemption of preference share/debenture: This is a permitted use as per Section 52(2)(d).
- E. Buy-back of its own share or other securities under Section 68: This is a permitted use as per Section 52(2)(e).
Conclusion
The Securities Premium Account can be utilized for purposes B, C, D, and E. Therefore, the correct option includes these four items.
The correct option is B, C, D and E only.
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