78. Application of premiums received on issue of [securities ] -
(1)Where a company issues [securities ] [Substituted by Act 21 of 1999, Section 5, for " share" (w.r.e.f. 31.10.1998). ] at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premiums on those [securities ] [Substituted by Act 21 of 1999, Section 5, for " share" (w.r.e.f. 31.10.1998). ] shall be transferred to an account, to be called "the [securities ] [Substituted by Act 21 of 1999, Section 5, for " share" (w.r.e.f. 31.10.1998). ] premium account"; and the provisions of this Act relating to the reduction of the [securities ] [Substituted by Act 21 of 1999, Section 5, for " share" (w.r.e.f. 31.10.1998). ] capital of a company shall, except as provided in this section, apply as if the [securities ] [Substituted by Act 21 of 1999, Section 5, for " share" (w.r.e.f. 31.10.1998). ] premium account were paid-up [securities ] [Substituted by Act 21 of 1999, Section 5, for " share" (w.r.e.f. 31.10.1998). ] capital of the company.(2)The [securities ] [Substituted by Act 21 of 1999, Section 5, for " share" (w.r.e.f. 31.10.1998). ] premium account may, notwithstanding anything in sub-section (1), be applied by the company-(a)in paying up unissued [securities ] [Substituted by Act 21 of 1999, Section 5, for " share" (w.r.e.f. 31.10.1998). ] of the company to be issued to members of the company as fully paid bonus [securities ] [Substituted by Act 21 of 1999, Section 5, for " share" (w.r.e.f. 31.10.1998). ];(b)in writing off the preliminary expenses of the company;(c)in writing off the expenses of, or the commission paid or discount allowed on, any issue of [securities ] [Substituted by Act 21 of 1999, Section 5, for " share" (w.r.e.f. 31.10.1998). ] or debentures of the company; or(d)in providing for the premium payable on the redemption of any redeemable preference [securities ] [Substituted by Act 21 of 1999, Section 5, for " share" (w.r.e.f. 31.10.1998). ] or of any debentures of the company.(3)Where a company has, before the commencement of this Act, issued any [securities ] [Substituted by Act 21 of 1999, Section 5, for " share" (w.r.e.f. 31.10.1998). ] at a premium, this section shall apply as if the [securities ] [Substituted by Act 21 of 1999, Section 5, for " share" (w.r.e.f. 31.10.1998). ] had been issued after the commencement of this Act:Provided that any part of the premiums which has been so applied that it does not at the commencement of this Act form an identifiable part of the company's reserves within the meaning of Schedule VI, shall be disregarded in determining the sum to be included in the [securities ] [Substituted by Act 21 of 1999, Section 5, for " share" (w.r.e.f. 31.10.1998). ] premium account.
