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Eduncle posted an MCQ
October 13, 2019 • 17:31 pm 0 points
  • UGC NET
  • Commerce

As per Section 52 of the companies Act, 2013 the balance in the Security Premium Account cannot be utilized for

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    Eduncle Best Answer

    According to Amarjit Chopra, past president, Institute of Chartered Accountants of India, the provisions of the Banking Regulation Act allow the share premium account to be used for setting off losses, provided due procedure is followed and approvals are given. In normal course of business, losses are set off against profits. In the absence of profits, losses are set of against reserves. Share premium is generally used for issue of bonus shares, buyback of shares and setting off some preliminary expenses.

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