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.
  • Why is mutual assent important in a contract?

    This is one of the key elements of a contract because is shows the meeting of the minds of both parties
  • Can I process/register multiple products at NAFDAC at the same time?

    Yes, you can process/register multiple products at the same time
  • Can I use the data collected legally for one purpose for another purpose?

    No, you can’t use the data collected for one purpose for a different purpose.
  • Can industrial design be protected under copy right law?

    Yes, it can be protected under copyright law as a work of Art.
  • What are the product categories available when registering with NAFDAC?

    The product categories include: Food, Cosmetics, Drug, Medical Device, Agro-Chemicals & Pesticide, Veterinary Products, Vaccines & Biologicals, Herbal and Nutraceuticals and Water
  • What’s the difference between a business name and an LLC?

    • A business name is a sole proprietorship, usually owned and managed by one individual only. Legally, the sole proprietor and his business are one. It simply means an individual trading with an alias. The sole proprietor is personally liable for all business related obligations.

    • A limited liability company on the other hand is a separate business entity from the individuals that hold its shares and act as directors. Legally, it’s a separate business entity and a person on its own who can transact business, own property separate from its owners and can sue or be sued. 
  • What is a trademark?

    A trademark can be any word, sign, symbol or graphic that you apply to your company, goods or services to distinguish them from those of your competitors; for example, a brand, product or company name, or logo. The trademark serves as a badge of origin for your business and its brands and products, and can consist of words, logos, slogans, colours and shapes, or a combination of all of these.
All FAQs
Call Us Now on +234 901 719 0079 Chat on WhatsApp