According to Section 52(2) of the Companies Act, 2013, the Securities Premium balance can be utilized for which of the following purposes?(A) Writing off preliminary expenses.(B) Issuing fully paid bonus shares.(C) Payment of dividends.(D) Buy-back of shares.Choose the correct answer from the options given below:
- A(A), (B) and (D) only
- B(A), (B) and (C) only
- C(A), (B), (C) and (D)
- D(B), (C) and (D) only
Solution & Step-by-step Explanation
Section 52(2) of the Companies Act, 2013 restricts the use of the securities premium account to specific purposes:Writing off preliminary expenses (A)Issuing fully paid bonus shares (B)Buying back its own shares or securities (D)Writing off issue expenses, commission, or discount on shares/debentures.Providing for premium payable on redemption of preference shares/debentures.It cannot be used to pay dividends under any circumstances. Therefore, only statements (A), (B), and (D) are permissible uses.