Securities Premium — Glossary

◈Definition

Securities premium (often called 'share premium' in practice) is the amount a company receives on the issue of shares that exceeds their nominal face value. If a company issues a share with face value ₹10 for ₹100, ₹90 is securities premium. The premium sits in a separate securities premium account on the balance sheet and can be used only for specific purposes under Section 52 of the Companies Act — bonus issues, buy-back, write-off of preliminary expenses, and similar.

◉See also

Paid-up Capital
The amount of share capital actually subscribed and paid by shareholders.
Authorised Capital
The maximum share capital a company is legally permitted to issue.

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