Issuing company shares at a premium

Issuing company shares at a premium

April 01, 2019

When shares are issued at a price higher than the face value (also called par value or nominal value), it is called an issue of shares at a premium.

Where a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premium on those shares shall be transferred to an account, to be called “the share premium account”, and the provisions of the CAMA relating to the reduction of the share capital of a company shall apply as if the share premium account were paid‐up share capital of the company.

The share premium account may be applied by the company in paying up unissued shares of the company to be issued to members of the company as fully‐paid bonus shares, in writing off‐

(a) the preliminary expenses of the company or

(b) the expenses of, or the commission paid or discount allowed on, any issue of shares of the company or in providing for the premium payable on redemption of any redeemable share of the company.

Reference- S. 120 CAMA

Team 618 Bees

 

The information in this blog post (“post”) is provided for general informational purposes only, no information contained in this post should be construed as legal advice, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through this post without seeking the appropriate legal or professional advice from the particular facts and circumstances at issue from a lawyer.This post is protected by intellectual property law and regulations. It may however be shared using appropriate sharing tools provided that our authorship is always acknowledged and this Disclaimer Notice attached

More Articles

Search

Connect With Us

Got any questions?

If you are having any questions, please feel free to ask.

Send us an email

Frequently Asked

  • Why must I file Annual Returns?

    It is a mandatory statutory requirement under the Companies and Allied Matters Act to file Annual Returns yearly. 

  • What is the first thing I must do to register a business in Nigeria?

    To register a business in Nigeria; you would need to conduct a name search of the business. You can achieve this using your CAC-CRP account.

  • Is there a penalty for late renewal of registration of products with NAFDAC?

    Yes, there is a late renewal fee, which is dependent on the category of the product.

  • Can I process/register multiple products at NAFDAC at the same time?

    Yes, you can process/register multiple products at the same time

  • What is the first thing I must do to register a business in Nigeria?

    To register a business in Nigeria; you would need to conduct a name search of the business. You can achieve this using your CAC-CRP account.

  • Can I trademark my logo and name separately? Why is this a good idea?

    Yes you can. The advantage is that it gives you the opportunity to have more than one logo or the opportunity to change your logo easily as opposed to registering the name and the logo as one trademark.

Call Us Now on +234 901 719 0079 Whatsapp icon Chat on WhatsApp