Under which section of the Companies Act provision has been made for the use of share premium?

Solution (By Examveda Team)

The correct option is "Section 52".

Section 52 of the Companies Act, 2013 deals with the provisions regarding the use of the Securities Premium Account (commonly called Share Premium).

According to this section, the amount received as share premium cannot be distributed as dividend but can be utilized only for specific purposes such as:

1. Issuing fully paid bonus shares to members.
2. Writing off preliminary expenses of the company.
3. Writing off expenses, commission, or discount allowed on the issue of shares or debentures.
4. Providing for the premium payable on redemption of redeemable preference shares or debentures.
5. Buying back its own shares in accordance with the provisions of the Act.

Why not the others?

Section 65 relates to unlimited companies to provide for reserve share capital, not share premium.

Section 78 was under the old Companies Act, 1956 and no longer applies in the 2013 Act.

Section 80 in the old Act dealt with redemption of preference shares, not with share premium utilization.

Therefore, the correct answer is Section 52.