Issue of shares at Premium

Section 52(1) states that when a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount of the premium received those shares shall be transferred to a "securities premium account" and the provisions of this Act relating to reduction of share capital of a company shall, except as provided in this section, apply as if the securities premium account were the paid-up share capital of the company.

Where a company issues at a premium, even though the consideration may be other than cash, a sum equal to the amount or value of the premium must be transferred to the securities premium. [Head(Henry) & Co. Ltd v. Ropner Holding Ltd. (1951) 2 All ER 994:(152) Ch 124 (ChD)].